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Trends in Generator Prices

The Electricity, gas, and water supply industry report for 2019 covers the results of a large sample survey of the respective industries and indicates that South Africa is generating less electricity. The electricity generation industry produced less electricity in 2019 than it did in 2010, recording a decline of 2%. National electricity production has slowed since 2018, with the country producing less electricity in 2020 than it did in 2004. While load shedding is very much a daily reality for many Sub-Saharan African countries, the rolling blackouts being experienced in South Africa, with the resulting economic costs, have been widely publicised because they were unknown in South Africa before 2007.
The situation is a result of inadequate generating capacity. South Africa produces around 47,000 MW from an installed generation capacity of 52,000 MW. Maintenance issues and breakdowns at ageing, poorly maintained power stations leave a significant portion of the generation fleet incapacitated. Eskom struggles with high debt that stems from operational mismanagement and corruption. The continuing load shedding frustrates South Africa’s citizens, businesses, and industry.

Frequent or long-lasting power outages constrain the economic wellbeing of households and businesses, discouraging investments in new income-generating activities. Load shedding in the first six months of 2015 was estimated to have cost South African businesses R13,72 billion in lost revenue with an additional R716 million spent by businesses on purchasing backup generators.

The global diesel generator market is predicted to reach $21,37 billion by 2022 as the demand for power generation continues to outstrip supply. Units in the 1-350 kVA size range, commonplace in residential and commercial sectors, account for around 49% of the market. This figure is expected to decline as rapid global industrialization in the Middle East, Africa, and Asia Pacific regions ramps up.

These regions will require heavy-duty machines for use in mining, road and rail development, construction, and oil and gas processing applications.

Emerging economies traditionally lack the infrastructure and grid capacity to support these operations, particularly in remote, inaccessible areas. Consequently, larger capacity generators in the one thousand plus kVa range are predicted to experience the highest growth. Generator prices are expected to remain high as demand remains high.

The Impact on Generator Prices of Load Shedding

There is a tendency for residential consumers not to make the “grudge purchase” of a generator or alternative power backup solution until they feel the “pain” of power interruptions. The Covid-19 pandemic has ramped up the discomfort felt by consumers during power outages because many of them now work from home.

Demand, especially in smaller capacity units, experiences peaks and troughs in popularity that run in tandem with periods of load shedding, but an ongoing base requirement remains because of grid unreliability and a general lack of confidence in the utility.

Generator prices tend to track the peaks and troughs of demand, so the prudent buyer will not wait until the load shedding is at its peak before making the buying decision. The trick is to make the decision between load shedding implementations when suppliers are more likely to negotiate on generator prices and installers may be more flexible with regard to generator installation prices.

A FAW-powered 12 kVA single-phase diesel genset was on offer online in South Africa in 2018 for R73,485 with an automatic transfer switch and canopy. The same unit is available online today for around R86,000. This represents an increase of just under 17%, which is almost exactly what the inflation has been over the period. This indicates that, in real terms, generator prices have remained relatively stable since 2018.

Generator Prices – the Good, the Bad, and the Ugly

If one looks at the smaller capacity generators aimed at the residential and small commercial buyer, two things become evident. Firstly, the range of units on offer is vast. Secondly, the range in generator prices between the cheapest and most expensive is mind-boggling. A Chinese suitcase based digital 2000W petrol generator is might be on offer from R8,990.00 with an equivalent, recognized, Japanese brand name in the same size and form factor available at around R24,900.00!

This represents a massive difference in cost between two devices that appear to be almost identical in what they offer. A plethora of options lies between these two price points and the consumer is faced with a bewildering array of choices. Is the Japanese, premium brand unit worth the extra cost? Does the maxim “you get what you pay for” hold good when it comes to generator prices? It is interesting to note that the smaller-sized generators on offer are provided exclusively with petrol power units with virtually no diesel machines on offer in the low end of the market.

Make the Right Choices and Do it Right!

With generator prices as low as a few thousand rand, there has been an upsurge in the number of people using portable units to keep a few basic essentials going when the power goes off. This is evident from the sales of online vendors, such as Takealot and Loot. What most people do not appreciate is that even though these units are sold as a retail proposition, they have to be professionally installed by a registered electrician.

A portable generator may not just be stuck in the garage with an extension cord running to a plug point. These connections are dangerous and illegal.

Apart from keeping your lights on, the different backup power options all have one thing in common: they must comply with safety guidelines, which means they require professional installation. Portable units must be operated in well-ventilated areas with good airflow to prevent carbon monoxide (exhaust fumes) from building up.

Fuel must also be stored safely in an area with adequate ventilation. Failure to install a portable generator properly may not only lead to any damage that results in not being covered by insurance but may, in the worst-case scenario, result in serious injury or death. Powering your electric fence, gate, alarm, and outside lights may allow you to negotiate a rate reduction with your insurance company.

Thieves exploit opportunities caused by power outages and they are far more likely to go to the home that is swathed in darkness than one where the lights are on! Having backup power will greatly reduce your risk.

Generators are not really DIY devices. Buy your unit from a company that specializes in generators and have it professionally installed. You may pay a little more but you will end up with a safe, reliable solution that delivers what is promised.