What you need to know before you buy
The decision whether to buy or rent a generator can have far-reaching implications for your company’s financial health. So, before you decide the most suitable option for your company, you would want to consider the total financial impact of each option — including potential costs and benefits.
Owning a generator encapsulates the following hidden costs:
Sunk Costs:
When you buy your own generator, you’re tying up capital that might otherwise go towards your core business. And with capital and financing costs rising, rental is a more attractive alternative. It may also provide you with tax benefits.
Inventory Costs:
If you plan to own your generator, you will also be required to maintain an inventory of recommended spare parts and consumables. The parts may be or may not be used, but still you would be paying the cost in order to ensure that your generator is always available to counter any emergency situation.
Inflexibility:
Purchasing generator can mean being “stuck” with it for some time. This is especially costly when you find out that you no longer need a particular set, or you would benefit more if you have a different one, but still you have to maintain and store what you’ve already bought. Renting not only ensures that you’ll always be able to find the right type of generator to meet your needs, but it also gives you the chance to test drive the generator over a series of weeks or months — ensuring that you’ve got the right size for your requirements.
Maintenance and Repair:
As the owner of the generator, you have to bear the entire expense of its maintenance and upkeep. This includes cost of the technicians, spare parts and record keeping. However, when you rent, all these services are provided by your rental company.
Increased Downtime:
If the generator that you own breaks down, you not only have to incur the cost of repairing it, but also bear the unnecessary expense of an idle crew while it’s being serviced. On the other hand, generator rental company will bring you a new, replacement unit, allowing your team to stay productive, and yes, it would be without any extra cost.
Depreciation and Obsolescence
Generally speaking, generator loses value over time, even if it’s properly taken care of. Moreover, models with new and advanced features continuously appear in the market that promise improved usability and versatility. This means that the generator you buy today may become obsolete even before it wears out. Nowadays, engine manufacturers are diligently working on reduction of emissions from exhaust, due to which the engines and technology rapidly get obsolete. Renting, however, provides you the luxury to remain updated and relevant.
Training Issues
When you own generator, you’re responsible for the time and effort it takes to train your crew to use it properly. Rental companies provide this service onsite under the supervision of an experienced professional.
The concept of hiring generator sets is fast becoming a norm as organizations don’t want to lose their focus from their main business and invest their time, money & resources like labor and staff in power generation. The concept is as simple as buying electricity from power utility company. So, it’s best to acquire rental power units and let the experts take care of your power generation needs.
