Home/Insights

The true cost of a "cheap" petrol generator

Generators feel cheap because we pay for them a litre at a time. Measured per unit of electricity, they are one of the most expensive ways to get power.

Costs·5 min read·Urim Energy

Grid electricity is priced per kilowatt-hour (kWh). Generator power is paid for in litres of fuel. Because the two are measured differently, most people never compare them. Once you convert generator spending into kWh, the comparison looks very different.

The simple formula

To find what your generator costs per unit of electricity:

Cost per kWh = (litres burned per hour × price per litre) ÷ kW of power you actually use

A worked example

Take a small 2.5 kVA petrol generator running a shop at around 1.5 kW. Generators this size often burn roughly 1 litre of petrol an hour at that load. If petrol costs ₦1,000 per litre:

₦1,000 × 1 ÷ 1.5 = about ₦670 per kWh, and that is before oil changes, repairs and replacement parts.

These are example numbers. Your generator, load and local fuel price will differ, so try your own below.

Work out your generator's cost per kWh

Fuel cost only:—Repairs, oil and your time come on top of this.

The costs that don't show up

What this means for mini-grid tariffs

A mini-grid tariff can look high next to the subsidised grid tariff. The fairer comparison for a business that already runs a generator is the cost per kWh you just calculated. For them, metered solar power can mean real savings, as well as quieter, cleaner and more reliable supply.

For households that don't own a generator, the picture is different. Any metered tariff is a new cost, which is why a good mini-grid plan starts by measuring what each community really spends today.

The takeaway: compare power by the kWh, not the litre. It is the only way to see what a generator really costs.

Sources and notes

  • Petrol prices change often. Check the latest National Bureau of Statistics price watch for your state.
  • Fuel consumption varies by generator model, age and load. The example is an illustration, not a measurement.
  • This article is educational and does not describe an Urim Energy project.