No matter where we travel in the world or whom we talk to, one of the most frequently asked questions in our industry is: How much does it cost to lease a natural gas generator? Several factors must be considered in order to evaluate the price of leasing a natural gas generator – we will help guide you through the basics in this article.
This article focuses on the costs of leasing natural gas generators built for prime power in industrial settings, like in oil and gas fields. Information about natural gas generators for standby applications can be found in our article titled ‘Do Natural Gas Generators Work for Standby Applications?’ The lease pricing evaluated in this article focuses on units tasked with running 24 hours a day, 7 days a week, in any location or climate. If you need information about purchasing, please see our article ‘How Much Does it Cost to Purchase a Natural Gas Generator?’
How Leasing Rates Work With Natural Gas Generators
Natural gas generators are not unlike many other goods that we as consumers are used to leasing. The fact is, there are many generators on the market and not all of the units available are suited for prime power applications. Once you have narrowed the field to industrial (as compared to automotive based) engine/generator packages that can operate in any environment, you will see add-on options much like you would see in leasing a car, home theatre system or other goods.
For example, leasing rates come in many forms and with many variables: length of lease, maintenance packages associated, al-a-cart add options, quantity discounts, return policies, discounts for any and all of the above based on the amalgam chosen, etc.
However, knowing that the generator provides an invaluable service to you, it is important to know some distinguishing factors effecting price. Industrial generators typically power artificial lift, oilrigs, oil facilities, man camps, buildings, and other power needs where line power is either unavailable, behind schedule, or unreliable.
With the understanding that people package and lease generators with different equipment, we have listed the most common features we see our customers regularly demanding:
Trailer mounted vs. skid mounted
Extended oil day tanks
Remote monitoring telemetry
Auto switching duel fuel kits
Propane vapor kits
Auto dump scrubber tanks
Fuel gas regulator
Over-sized cooling package
Cold weather package
With so many different options, we build our units to take out the guesswork. Every single one of our units comes pre-equipped with all of the above-described options except for additional sound attenuation (typically used only when industrial units are placed near homes or certain types of protected wildlife). This type of package allows the generator set to function in all environments around the world, while also giving the most reliable and consistently priced solution to the customer.
Maintenance Plans and Natural Gas Generators
Generator with Maintenance: When a customer leases a generator with an all inclusive service plan, they don’t have to worry about anything except providing a fuel source and electrical hook-ups. The size ranges of engines most commonly used for industrial prime power start in the 8 Liter range and provide around 100kW-125kW of prime power to engines that can provide in excess of one megawatt of power.
When looking at well-built industrial engines that will last as long as needed, the average price range is near $45 – $60 per kW per month. For example, a 125kW prime power generator set costs in the range of $5,500 – $7,500 per month. While there is variation depending on brand and some of the factors discussed above, this price range is typical for leasing generators.
Some companies provide delivery, set up, maintenance, and 24/7 support in their lease. However, it is more common to have a lease price as well as separate charges for delivery, set up, maintenance and 24/7 support.
Some companies charge a premium for response times of 2 hours or less for service, while others provide a 2-hour response time for any service in any area as part of the monthly lease cost. Typical delivery costs range from $2.00 – $3.00 per mile round-trip in addition to technician time of $90 – $125 per hour. While service costs widely vary depending on distance from location of the generator, technicians in the area, etc., the following routine maintenance prices can be expected in addition to lease prices:
50kW – 125kW: $400-$1,200/month
Up to 500kW: $1,000 – $1,500/month
Up to 1,000kW: $1,200 – $2,000/month
Generator without Maintenance: We like to make sure the consumer is aware that maintaining the units is a highly technical process. While performing an oil change is something that is not a challenge, it is much more challenging to adequately perform valve lash adjustments and other important diagnostic work on industrial generators. For these reasons, we provide all-inclusive pricing that includes delivery, set up, preventative maintenance, and 24/7 field support with a 2-hour or less response time. Our technicians are trained on the maintenance and support of our highly technical industrial engines so as not to set them up for failure.
The Bottom Line
In almost all industrial applications, especially oil and gas fields, natural gas powered generators save users money every single day compared to their diesel counterparts. Importantly, there are many areas of the country where natural gas generators can be more cost effective and more reliable than line power coming from your local utility.
Given the complexity of the generator’s systems and applications, it is important to be an informed consumer and ask questions prior to leasing a generator. Routinely we recommend leasing or leasing to own if you do not have prior generator experience.
For more information on diesel savings, please see our article titled: ‘How Much Does it Cost to Fuel A Diesel Generator?’ Thanks for reading and considering the prospect of saving by using one of our units. We hope we have accomplished our goal of educating you about the cost of leasing a natural gas generator.