Are Home Generators Worth Your Money?

A home generator can offer peace of mind, providing backup power for essentials when outages hit unexpectedly. From keeping your fridge running during a storm to maintaining home comfort, generators come in a number of forms --portable, standby and even solar-powered -- tailored to fit different needs and budgets. As you explore options, understanding the costs, installation requirements and benefits can help you decide if a generator aligns with your lifestyle and home setup. This guide covers the essentials to help you weigh the pros and cons of adding a generator to your home.

The average American experienced 5.5 hours of outages in 2022, partly due to severe weather. That's fewer hours than the previous two years, but the long-term trend shows that outages are becoming more common, with the increase driven by weather-related outages.

Addressing the conditions that cause extreme weather requires systemic solutions, but you can keep the lights on and gain a little peace of mind with a home generator. But generators come with a cost that may make them seem like more of a luxury than a necessity.

Consider the costs of a home generator, understand the installation process and know what to expect from this backup power source. Then you can make an informed decision as to whether you want a home generator to kick on when the lights go out. Because maybe you're better suited for an alternative or are comfortable and prepared to remain in the dark until an outage passes, even as they become more common.

How much does a home generator cost?

The cost of a home generator will depend on several factors, from its make and model to its power capacity and features. According to HomeAdvisor, the typical cost of a whole-home generator lands between $5,000 to $25,000.

One of the biggest factors in the price of a generator is how much it will have to power, typically measured in kilowatts. According to the United States Energy Information Administration, the average American household uses just short of 900 kWh per month, about 30 kWh per day. Typically, generators with 20 kW of capacity are considered whole-home generators and cost more. If a generator has less than 10 kW of power, it's meant for smaller jobs and will cost less. 

Another factor that plays a significant role in the cost of a generator is the fuel source. Gasoline-powered generators are the most common type of generator and typically cost less than alternatives like solar battery backups, which store electricity for you to use when you need it. 

You will have to factor the cost of the fuel itself into this equation, as you'll need to fuel the generator to use it. Some home generators run on natural gas, which is typically cheaper than gasoline. Propane is a common fuel source for portable power stations, less so for whole-home options. Diesel is considered to be the most efficient generator fuel, although it is less effective in cold temperatures. These trade-offs and considerations will play into your decision.

Generator installation, maintenance and other costs

"The largest expense by far is the cost of purchasing and installing the generator," according to Don Whaley, founder and former president of Direct Energy. Installation costs will vary by the type of generator you purchase. 

With a portable generator, there is no real installation cost. A whole home generator, by contrast, is a more permanent structure that requires proper setup. Installation costs include labor and electrical work including circuitry and transfer switches. It may include installing a concrete pad for the generator. All that can cost between $500 to $5,000, according to HomeAdvisor.

Maintaining a generator carries a small annual cost. You should also get your generator inspected before seasons when you're most likely to need it. This can cost as much as $80 to $300.

Then there is the cost of actually running a generator, which varies by type of generator. Estimates from HomeAdvisor suggest that if you are operating a whole home generator that is powered using diesel or propane, you can expect to pay around $200 per day for 20 kW of power. A portable gas generator providing 5 kW of power can cost around $100 per day to run, depending on gas prices. 

Installation costs, including any needed concrete work, is part of the total cost.

JodiJacobson/Getty Images

Natural gas, which is commonly used for whole home generators, tends to be the most affordable option, although it can also rack up costs, depending on how long you have to depend on it. 

"The cost of running the machine, assuming the fuel is natural gas piped to your home, can be significant," Whaley said. "But in the current market, with natural gas hovering at or below three dollars per MMBtu (metric million British thermal unit), you'd have to have an extended outage for that cost to become significant."

What are the benefits of a home generator?

Having power at home through an outage isn't just about convenience, although it certainly makes riding out a storm easier. It's also about safety and security. "Outages lasting for days aren't just inconvenient. They can be life-threatening," Whaley explained. 

When power outages strike for short periods, a generator can prevent the hassles that often follow, like food spoiling. When outages are longer or the result of extreme weather events, generators can prevent disasters. 

When Texas experienced a severe winter storm in 2021, many households were unprepared for the loss of power and experienced freezing cold temperatures. More than 240 people died as a result of the storm and the resulting power outages, according to the Texas Department of Health and Human Services. Generators can also keep your air conditioner running during heat waves that knock out electricity. In these situations, generators can be life-saving purchases.

The map below shows data from the US Energy Information Administration about how many power outages per year, on average, the average utility customer in each state had from 2018-2022 (using all reporting methods). We also looked at the average total duration of outages per year, in hours. Generally, states along the coast and those in the Southeast had the most and longest outages.

Is a home generator worth it?

Having a home generator during a power outage can be convenient or potentially life-saving depending on the situation, but it does carry a significant cost that some might not be willing or able to pay. 

"It's unlikely that the system will ever pay for itself based on electricity produced versus the cost of electricity from the grid," Whaley said. A generator is more an investment in protection than one that you may expect a return on.

According to Whaley, it's worth considering your situation and how your household may benefit from a home generator. "Families with small children or elderly parents are the ones for whom generators make the most sense. These are the vulnerable segments of the population and those least adaptable to extended outages," he explained. 

Whether owning a home generator is worth it comes down to whether you can afford the up-front cost and ongoing maintenance, and how at-risk you and your family might be if you are without power for an extended period. Alongside your budget, take into account the support network around you and your access to other essential goods.

Backup batteries are a relatively new alternative to home generators.

Savant Systems

Alternatives to a home generator

Generators that keep your whole home powered in an outage may be too costly or overkill for some households. Some alternatives can power a room or essential systems throughout your home at a cost that may better fit your budget.

A portable generator, typically designed to provide power to a single room for a limited period, typically costs between $500 to $2,000, compared to $5,000 to $18,000 for a whole home option. There are also critical systems generators, which are meant to support essential systems including heat, lighting and kitchen appliances. You can expect a critical systems generator to cost $2,000 to $6,300.

These systems typically run on fossil fuel sources, but there are solar options available, as well. Most solar and battery storage options cost more, especially for higher capacity, but can operate without fossil fuels.

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