True Generator Cost

True Generator Cost

The low upfront cost of generators often hides their true cost. Since 2014, 02 Alternative Power Solutions has run a survey asking Nigerians about the true cost of owning a generator. This article discusses some of the results of that survey. Our analysis is restricted to generators less than 7kVA where we have the most data. We also restrict our analysis to responses received after May 10, 2016 – the last time the cost of petrol was increased.

Upfront Cost

Generator size Median cost

0 – 2 kVA ₦ 45,000

2 – 4 kVA ₦ 60,000

4 – 7 kVA ₦ 97,500

Lifespan

The lifespan of the generator is an important factor because the upfront cost will have to be spent every time the generator is replaced. We found that generators have a median lifespan of 4 years.

Fuel Cost

We have found the median duration of generator running to be 4 hours.

Generator size Median fuel cost

0 – 2 kVA ₦ 90 per hour (₦ 360 per day)

2 – 4 kVA ₦ 100 per hour (₦ 400 per day)

4 – 7 kVA ₦ 143 per hour (₦ 572 per day)

Annual Maintenance

An often-overlooked generator cost is the cost of maintenance – both periodic maintenance like oil changes and repairs when they break down.

Generator size Median annual maintenance cost

0 – 2 kVA ₦ 15,750

2 – 4 kVA ₦ 12,000

4 – 7 kVA ₦ 20,500

Total Annual Cost

To get the annual cost, we divide the upfront cost by the four years that the generator lasts and add it to the annual fuel and maintenance costs.

Generator size Estimated total cost

0 – 2 kVA ₦ 158,000 per year (₦ 13,000 per month)

2 – 4 kVA ₦ 171,000 per year (₦ 14,000 per month)

4 – 7 kVA ₦ 250,000 per year (₦ 21,000 per month)

Unincluded Cost

Some costs are hard to quantify and are not included in this analysis

  • Stress: Including chasing after generator maintenance people, buying fuel (especially during times of scarcity), starting and turning off generators

  • Time: Time spent in fuel queues

  • Noise

  • Health costs from associated air pollution

  • Staying without electricity to reduce the cost of running generators

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