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Should I Buy A Generator?

Standby/Emergency, Prime, or Continuous Power Supply for my home or business?

There are numerous reasons for individuals or businesses to own their backup/standby, prime or continuous power supply generator set(s). Generators provide an added level of insurance to your daily routine or business operations, ensuring uninterrupted power supply. The inconvenience of a power outage is rarely noticed until you are the victim of an untimely power loss or disruption.

Backup Power for individual residences can avoid the inconvenience of power outages by purchasing a small backup generator. Electricity is essential to maintain lighting, HVAC, refrigeration, electronic entertainment equipment, household appliances, water in some cases, and security systems.

The inconvenience of losing power may not be realized in your pocketbook but rather in the safety and well-being of your family. Houses and small residences only require a small amount of backup power, typically in the neighborhood of 8-10kW. Larger residences or businesses may require more power, which will increase the cost slightly, but still is highly affordable considering the benefits of owning your own power supply.

As a business owner, an emergency standby generator provides an added level of insurance to keep your operation running smoothly without interruption. Luckily, the decision to purchase a generator is easily made by performing some basic financial calculations.

First, you must determine how much money your business generates on a daily basis. Only consider the revenue that is strictly dependent on the power supply (i.e., phones, computers, payment systems, electricity, process equipment, machinery used for the business, etc.).Next, factor in any capital equipment or assets that depend on a power supply in order to maintain its value (i.e., perishable goods, etc.). You must also consider costs that are associated with a startup or shutdown of a process or manufacturing line.

Costly startups and shutdowns due to power outages can prove to be very costly. Paying employees to wait around until the power is restored, not knowing how long it maybe can add up to hundreds if not thousands of dollars depending on the number of employees you have. Finally, add up all of these costs and multiply it by the number of power outages you have each year. This will give you your annual operating losses due to power disruptions. Dividing the cost of the generator by these potential losses will determine how many months it would take for the generator to pay for itself essentially.

Costs alone should not be the driving factor in purchasing a generator. Another advantage of having a localized backup power supply is to provide a consistent power supply to your business. These expensive company assets require consistent power quality to function correctly.

Generators also allow for end users, not the power companies, to control and provide a consistent power supply to their equipment. End-users also benefit from the ability to hedge against highly volatile market conditions. When operating in a time-of-use based pricing situation, this could prove to be a substantial competitive advantage. During times of high power pricing, end-users can switch the power source to their standby diesel generator for more economic power.

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