Is It Cheaper To Run A Natural Gas Generator Than Electricity?

After reading the below information, you will know all about whether Is It Cheaper To Run A Natural Gas Generator Than Electricity? Knowing their benefits and drawbacks will be easier for you to decide whether to invest in natural gas generators.

Natural gas, as opposed to other fuels like diesel, is the preferred fuel for a gas generator. In comparison to other generators powered by fossil fuels, natural gas generators are more efficient and economical.

According to the knowledge of the U.S. Energy Information Administration, natural gas generators made up 43% of the nation’s capacity to produce power in 2019. The fact that natural gas is a dependable, cost-effective, and readily available fuel in the U.S. is a justifiable reason. It is the best energy source for producing a consistent supply of power.

Is It Cheaper To Run A Natural Gas Generator Than Electricity?

If you were curious about the fuel usage of a natural gas generator per kWh, it is 7.43 ft3 of natural gas or around $0.08 per kWh. That is considerably less expensive than the $0.1319/kWh national average cost of power.

Cheaper To Run A Natural Gas Generator Than Electricity

A natural gas generator is your best buddy during a power outage. We must burn natural gas to produce electricity since we need access to grid power. We investigated the cost of running a generator on natural gas. Three main factors influence a generator’s operating costs:

  • The generator’s size. A 20,000W generator will use more natural gas than a 5,000W generator. How much a generator costs per hour may be calculated using the natural gas running cost calculator. Further down, we offer tables that we determined for generator gas use.
  • Local gas prices in your area. Natural gas prices and fuel costs for natural gas generators per kWh are connected. Example: Consider a generator that burns natural gas for $20 per thousand cubic feet instead of the identical generator that costs $10 per thousand cubic feet. The running cost per kWh for a $20 natural gas cost generator will be twice as high as that for a $10 natural gas cost generator.
  • The load on the generator. Generators are operated between 0% and 100% of their maximum output wattage. The operating costs of your generator will be higher if you operate it at 60% load than if you operate it at 40% load.

We can accurately determine how much it costs to operate your natural gas generator per hour, day, week, or month if we are aware of all these factors. You should expect to pay between $0.02 and $2.41 per hour (for a generator rated at 1,000 W at 25% load and 30,000 W at 100% load, respectively) to run a generator on natural gas. Natural gas will be used in the range of 1.86 to 222.90 ft3 per hour.

We created a Gas Generator Fuel Consumption Calculator that determines how much fuel any natural gas generator will need during operation. Enter the generator’s size, the cost of natural gas, and the typical load, and the calculator will tell you how much natural gas, in U.S. dollars, this generator uses every hour.

Additionally, we determined the operating expenses of natural gas generators with outputs of 1,000 W, 2,000 W, 3,0 W, 5,0 W, 7,000 W, 8,000 W, 10,000 W, 12,000 W, 15,0 W, 20,000 W, 25,000 W, and 30,000 W at an average price and 1/4, 2/4, 3/4, and full loads.

Is Running A Generator More Expensive?

Calculations can be a little challenging because electricity prices and the cost of fossil fuels like natural gas, propane, and diesel vary from state to state and because generators provide different levels of temporary power, from providing enough power to run your entire home to covering only the necessities.

Is Running A Generator More Expensive

But, to assist you in getting a general idea of operational costs when used to compute fuel prices, we’ve provided some average values below that are based on current estimates:

The Price Of Running A Gasoline Generator

Are they getting ready to fill a gas generator for a tailgate party? Generators powered by gas are not the most economical form of energy. With a typical 5-kilowatt generator used to power solely “survival appliances” taking roughly 0.75 gallons of fuel per hour and an average gasoline price of $2.89 (July 2018 estimates), running a generator for the day would take about 18 gallons of fuel, costing $52 per day.

Diesel Generator Price Operation

Based on an average fuel price of $3.17 per gallon and a 20-kilowatt generator that can power primary necessities like HVAC, well pumps, and water heaters, portable diesel choices would cost roughly $12 per day in fuel expenditures.

Propane Generator Price Operation

Propane burns faster but is a greener energy choice than gas and diesel-powered generators. If you fuel your vehicle with 20-pound tanks, the price may be slightly higher than gas. The calculations change, though, if you have a sizable tank on-site.

A 20-kilowatt portable generator would use roughly 3.45 gallons of fuel per hour, or 83 gallons per day, costing more than $200 in fuel. Local tank? With a 22-kilowatt standby generator (rather than a portable unit), you can get more electricity while spending a little over $200 per day and burning around 3.6 gallons of fuel per hour when fully loaded.

The Price Of Running A Natural Gas Generator

A “whole home” backup generator provides more effective electricity generation for locations subject to power outages and with a ready natural gas hookup. Operational costs range from $20 to $40 per day, costing about $3.26 per thousand cubic feet, depending on generator size:

  • 7-kilowatt portable generator: Consumes up to 118 cubic feet per hour and runs at roughly $0.82 per hour.
  • 15-kilowatt portable generator: Consumes up to 245 cubic feet per hour and runs at roughly $1.71 per hour.

Compare Diesel And Gas Generators

Industrial generators don’t come in “one size fits all” designs. What is most effective for one operation might not be suitable for another. In several categories, we compared and contrasted natural gas and diesel generators. You should speak with an expert in the field and review your company’s emergency generator needs before determining which generator to buy. It would help if you thought about the following:

Initial Cost

Generally, buying a diesel generator is less expensive than buying a natural gas generator. This can be a crucial consideration for a new company looking to cut costs during the startup phase or an existing company replacing an emergency generator. Both options need an upfront investment, but the increased efficiency of the natural gas generator may allow the price gap to be reduced over time.

Fuel Cost

The fuel cost over time is the most significant recurring expense a company should consider when deciding between natural gas and diesel generators. Using a less expensive generator only makes sense if the running costs are balanced with the savings as fuel is bought and turned into energy. Even though natural gas and diesel are both energy commodities, their prices fluctuate slightly apart from one another.

Like gasoline, diesel is sold in gallons, and the price of crude oil heavily influences its price. In contrast, the cost of natural gas is expressed in cubic feet. Although it may grow when energy costs rise, it is not tied to oil output, and demand like diesel is.

However, a member of the same family as natural gas, propane is marketed in gallons and is available in liquid form. The cost of running a commercial generator should consider other factors in addition to the average price of different fuels. Other elements include:

  • The projected frequency of use for the generator. Your fuel prices will rise if you use your generator more frequently.
  • The generator’s electrical output;
  • The fuel’s energy yield; natural gas offers more energy per dollar at the current price.
  • The price of delivery for propane, diesel, or other types of fuel in your region.

It’s critical to keep in mind that fuel costs fluctuate. Your business may purchase a generator to take advantage of current pricing, only to discover the diesel or natural gas. Your company becomes more expensive due to increased demand or a shortage in production. Hence, even while fuel prices are a crucial factor, choosing to buy a generator shouldn’t be based entirely on current fuel pricing patterns.

How Much Does (Equivalent) Grid Power Cost?

Your monthly utility statement gives you a general sense of how much you spend each day on power. The most recent statistics on average electricity costs nationwide, based on 2017 data, showed the average monthly bill at $111.67, even though, like petrol, electricity tariffs vary by state and location. If you double it by 30 days a month, grid-based power costs roughly $3.72 per day or $0.15 per hour.

What’s Better, Grid Or Generator Power?

Grid power is significantly less expensive than the daily cost of operating a generator using any fuel type, as can be seen without needing to be a math expert. It is a more cost-effective choice over time due to the convenience of drawing power from the grid and reduced expenses.

Using a generator is less environmentally beneficial than using grid power. But, despite the extra expense, the majority would still view spending a little more on fuel for a generator to secure power in the event of an outage as a worthy investment.


In conclusion Is It Cheaper To Run A Natural Gas Generator Than Electricity? The tiny scale of a household unit does not justify producing your electricity. Because they are predominantly air-cooled, natural gas appliances cannot withstand continuous, heavy use. In addition, utilities have significantly more distribution options and purchasing power in large markets.

Daily price negotiations take place, and products are distributed directly from pipelines instead of being stored in tanks. Setting up a gas line to your home for the purpose could cost as much as or even more than a propane tank. The optimum application for home generators is as a backup or emergency power source.

Frequently Asked Questions

Is it cheaper to run a generator on natural gas?

Natural gas or propane is used to power Generac household generators. Propane holds a higher energy density than natural gas but typically costs more. Natural gas is the less expensive fuel for your generator since it costs roughly 40% less than propane.

Is it cheaper to run a generator or use electricity?

It doesn’t take a math genius to figure out that the daily cost of grid power is much lower than the cost of operating a generator using any fuel type. The long-term savings from using the grid’s electricity compared to alternative methods make this option the best value.

Are natural gas generators more efficient?

Bi-fuel, natural gas, and diesel generators have a track record of dependability and performance. Natural gas generators can meet the 10-second startup time needed for emergency power systems. Diesel generators have an overall efficiency (HHV/kWe) of 15% to 25% greater than natural gas generators.

How many hours will a natural gas generator last?

A backup generator can often power a medium-sized home for up to 3,000 hours, while it is advised that you only continually run a generator for 500 hours.

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