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
The costs that don't show up
- Maintenance: oil changes, spark plugs, carburettor repairs and eventually a new generator.
- Time: queuing for fuel and fixing breakdowns.
- Health and safety: noise, fumes and the real danger of carbon monoxide when generators run near living spaces.
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.
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.