How Backup Generators Can Save Your Business During a Power Outage

Business interruption insurance might be able to supplement your income after a power outage, but it can’t recover the customers you may lose while your deliveries are delayed or your service offerings come to a halt. That’s why backup power generation is the best insurance there is. 

Worldwide Power Products can set you up with a new or used backup generator for sale or rental, or a turnkey emergency power solution that keeps you operating after your local competitors have gone dark. At the very least, this energy reliability will keep you from losing any global customers, and it very well may win you scores of new ones in your community whom you’re able to serve when no one else can.

New standby generator installed at Gulf Coast Distillers, Houston

Generators aren’t for just hurricanes…

There are many types of disaster scenarios–some spontaneous, others with a little forewarning–beyond just cyclones that can down power lines and knock out your local grid, including:

  • fire
  • high winds,
  • tornadoes
  • ice and snow
  • heat
  • earthquakes
  • landslides 

So it doesn’t matter if you live on the Gulf Coast or in the Panhandle, having backup generation is a wise business decision. 

Outages are becoming more common

Our home state of Texas is a perfect example of how the power grid seems to be more vulnerable than ever. A devastating winter storm in February, 2021 knocked out power for days for millions of Texans who are used to summertime outages for thunderstorms and hurricanes, but not for snowstorms. 

Such outages are becoming more common in the U.S., and not all of them can be chalked up to bad weather (even though climate change is being blamed for driving deadly disasters all over the world). 

America has lagged behind all other developed countries for years now in terms of average length of outages per year, and the trend isn’t improving. There is ongoing debate about whether the push toward renewable power may be overestimating those generation sources’ ability to deliver when called upon.      

How do backup generators keep the power on?

Backup power generation works like this:

  1. The utility power drops out. 
  2. The generator’s automatic transfer switch (ATS) recognizes the power loss and activates the generator, restoring your power.
  3. The generator continues running until utility power is restored, at which point the generator shuts off automatically. 

This scenario assumes a standby generator setup with an automatic transfer switch (ATS)

Towable or mobile diesel generators can range in size from 14 kW – 2000 kW and can be an excellent temporary power source.  A certified electrician has the ability to connect a towable diesel generator to the main power source of a business within minutes. Portable generators (2000 – 7000 watt or 2-7 kW) are generally considered to be residential solutions; your business would have to have a very small power footprint to be able to subsist on portable generator power.  

However, if your operations aren’t power-intensive, a portable gasoline or propane generator could see you through several days of outages, if necessary. You wouldn’t be able to automatically transfer to backup power, however; portable generators are manual transfer only. There are two main formats for standby generators: diesel and natural gas.

Why do you need a backup generator?

Outages cost the U.S. economy an estimated $150 billion every year, with one in four companies reporting their power drops out at least once per month. 

Consider what would happen at your business if you were forced to go without power for several days or more: 

  • Perishable goods and other assets could be destroyed.
  • Your reputation could take a serious blow as you fail to meet your obligations to customers.
  • You may face the unforeseen costs of restarting or rebooting heavy machinery or equipment.
  • Employees can be injured in a variety of ways, opening you up to lost productivity and even lawsuits.   
  • And of course, the obvious: being forced to close day after day dries up your income while rent, taxes, paychecks, and other bills continue unabated.

How much do commercial backup generators cost?

Size is the main determining factor in the cost of a backup commercial generator, and obviously this can vary quite a bit. 

If yours is a small or medium-sized business, you likely need a generator capable of outputting between 20 kW and 100kW, for a cost of between $10,000 and $40,000. Cost can vary based on condition, manufacturer, and fuel type (diesel, natural gas, or propane).

For large or industrial businesses, you may need up to 500 kW or 1,000 kW or more, which run tens or hundreds of thousands of dollars. The typical range of prices for a diesel or natural gas industrial generator is $300-$450 per kW.

Is a generator worth the investment? Here’s how to calculate the ROI

As a business owner, there’s a simple method of calculating the financial losses you would incur in the event of a power failure:

(1) Determine the amount of revenue per hour that is predicated on your business having electricity. (If your business operates completely on computers or telephones this may be 100%!)

(2) Add up the total value of assets that would be damaged or destroyed in the event of an outage—this could include perishable goods, sensitive software or machinery, or even long-term client relationships (due to the perception of unreliability).

(3) Account for any extraneous electricity costs that will be incurred from having to reboot powerful computer equipment or restart heavy machinery. (For multi-day outages, only add this cost once.)

(4) Total the amounts of items 1-3; this is the lost revenue you can expect from an average outage.

Once you have that number, you can easily estimate the amount of time it will take to see a return on your investment in backup power generation.

(5) Multiply the amount of daily losses by the average number of annual outages in your area. (Your energy provider should be able to provide you with this number, either by request or as part of a publicly available annual report.)

(6) Divide the price of your generator by the result of the previous step; the result is the length of time (in years) it will take to recover the purchase price.

Example (assuming a 1.5 hour outage):

  • $3,000 revenue lost per hour x 1.5 hours +
  • $100,000 assets destroyed +
  • $5,000 equipment reboot =
  • $109,500 lost per outage
  • $109,500 x 2 outages per year = $219,000 lost per year
  • $300,000 / $219,000 = 1.37 years to breakeven

Of course, employees and others can be endangered by a power loss during a natural disaster. 

A sudden outage can immediately put people in harm’s way: aborted machine cycles could cause heavy components to come tumbling down upon their operators or failed lighting could impair the balance of individuals walking down staircases. 

During a long-term outage, people remain in further jeopardy; essentials such as air flow, hot water, visibility and emergency communication can be compromised by the lack of electricity.

So the “worthiness” of the investment in backup power shouldn’t be strictly a numbers game; the certainty and predictability a generator offers has significant value that can’t be represented only by dollars. The peace of mind can be priceless.

Your options for acquiring a backup generator

There are three main ways to get set up with a backup generator. Whichever method you prefer, Worldwide Power Products can meet your needs:

Purchase beforehand

If you’re serious about protecting your business, the best time to get a standby generator in place is well before an outage looms…in other words, today. This will be a long-term solution you can count on for years. Worldwide Power Products can design a custom solution for you if required based on your energy profile, budget, location, and more, plus install it and perform regular maintenance over its entire lifetime.

Contingency rental

Reserving a generator for hurricane season or other high-risk periods is a cost-effective way to protect your business in case it’s needed. This would be a trailer-mounted, mobile generator that we would deliver, while taking care of fuel, transportation, installation, and removal afterward.

Emergency rental

Many business owners wait until an outage is imminent or has already happened to seek backup generation. And while we make every effort to respond during these times, contingency rental customers take priority and circumstances on the ground often make delivering emergency rentals difficult. Assuming we have a unit available and can safely get it to you, we offer the same service as with our contingency rentals, with fuel, transportation, and installation covered. 

Read more about how we can help you prepare for power outages with a backup power solution.