What a backup generator does and why you might need one

A backup generator is a machine that makes electricity when your power goes out. It runs on fuel — usually natural gas, propane, or diesel — and automatically turns on when it detects that the grid has failed. Unlike a portable generator you haul out during a storm, a permanent backup generator sits outside your house, connects to your electrical panel, and switches on without you doing anything.

Most people install one because they live in an area with frequent outages, work from home and cannot afford to lose internet and power, have medical equipment that needs constant electricity, or straightforward want the peace of mind. A backup generator keeps your refrigerator running, your furnace heating, your sump pump working, and your devices charged during an outage that might otherwise last hours or days.

The trade-off is cost and maintenance. A permanent generator costs between $3,000 and $15,000 installed, depending on size and fuel type, plus annual servicing. A portable generator costs $500 to $2,000 but requires you to set it up, run extension cords, and refuel it by hand.

Key Takeaways

  • Permanent backup generators run on natural gas, propane, or diesel and automatically start when power fails, while portable generators require manual setup and refueling.
  • Generator size is measured in kilowatts (kW), and you need to know your home's peak power demand to choose the right one — a 7 kW unit handles basics like heating and refrigeration, while 15 kW or larger powers most of a house.
  • Natural gas generators are cheapest to run but require a gas line to your home; propane generators are portable but need regular tank refills; diesel generators are efficient but louder and more expensive upfront.
  • Permanent generators need a concrete pad, electrical hookup to your panel, and annual maintenance including oil changes and load testing to stay ready.
  • Local building codes and permits are required in most places, and your homeowner's insurance may offer a discount if you install one.

Permanent vs. portable generators — which type makes sense for you

A permanent (standby) generator is bolted to a concrete pad next to your house. It connects directly to your electrical panel through an automatic transfer switch, which detects an outage and flips power over to the generator in seconds — you do not have to do anything. It runs on natural gas from your home's existing line, or on propane from a tank buried or sitting nearby. Most permanent generators run at 7 kW to 20 kW, enough to power essential circuits like heating, refrigeration, and lights, or in larger sizes, most of your home.

A portable generator is a box on wheels or with a handle that you store in a garage or shed. When a storm hits, you wheel it out, plug it into an outdoor outlet, and run heavy-duty extension cords into your house to power specific devices. Portable generators are smaller (3 kW to 10 kW typically) and cheaper upfront, but they are loud, produce exhaust, and you have to refuel them every 8 to 12 hours during an outage. You also cannot run them indoors or in an attached garage — carbon monoxide will kill you.

Choose permanent if you have frequent outages, medical equipment, a sump pump, or you work from home. Choose portable if outages are rare, you want to avoid installation cost, or you rent and cannot modify the building.

How to figure out what size generator you actually need

Generator size is measured in kilowatts (kW). The bigger the number, the more devices it can run at once. Most homes need between 7 kW and 20 kW for a permanent generator, but the right size depends on what you want to power during an outage.

A 7 kW generator typically covers essentials: your furnace or heat pump, refrigerator, water heater, some lights, and a few outlets. It will not run your air conditioner, electric stove, or clothes dryer at the same time as everything else. A 10 to 12 kW generator adds air conditioning or an electric stove. A 15 to 20 kW generator powers most of your house, including multiple large appliances running together.

To estimate your needs, look at the breaker panel in your basement or utility room. Each breaker is labeled with its amperage — your furnace might be 30 amps, your water heater 40 amps, your air conditioner 40 to 60 amps. Add up the amps for everything you want to run, multiply by your home's voltage (usually 240 volts), and divide by 1,000 to get kilowatts. Or ask an electrician — most will estimate for free. Oversizing by 20 to 30 percent is normal and gives you room to add devices later.

Fuel types and what each one costs to run

Natural gas generators are the most common for permanent installation. They connect to your home's existing gas line, so you never run out of fuel and never have to refuel. They are quiet, efficient, and the cheapest to run per hour — roughly $0.15 to $0.30 per kilowatt-hour depending on your gas rates. The downside is that you need a gas line to your home, which costs $500 to $2,000 to install if you do not already have one. During a widespread outage, gas lines can fail, so your generator might not work if the gas company's infrastructure is damaged.

Propane generators run on propane stored in a tank outside your house. They are cheaper than diesel upfront and quieter than portable generators. You can install one even if you do not have a natural gas line. The catch is that you have to refill the tank regularly — a 500-gallon tank might last 5 to 10 days of continuous running, depending on load. Propane costs more per kilowatt-hour than natural gas, roughly $0.40 to $0.60. Propane can degrade in storage, so tanks need to be serviced annually.

Diesel generators are the most efficient and can run for long periods on a single tank. They are common in commercial settings and for people who want maximum runtime. Diesel is cheaper than propane per gallon in most places, but diesel generators are louder, more expensive upfront, and require more maintenance. They are less common for residential use because of noise and the need for a larger fuel tank.

Installation, permits, and what happens after you buy one

Installing a permanent generator is not a DIY job. You need a licensed electrician to connect it to your electrical panel and install the automatic transfer switch, which detects the outage and switches power over. You also need a concrete pad poured where the generator will sit — usually next to your house, away from windows and doors so exhaust does not enter. The pad costs $200 to $500, and the electrical work costs $1,500 to $3,000 depending on how far the generator is from your panel and how complex your wiring is.

Most cities and counties require a building permit before installation. The permit process usually involves submitting plans, paying a fee ($100 to $500), and having an inspector sign off after the work is done. Some places also require a gas line inspection if you are running a natural gas generator. Check with your local building department before you buy — they can tell you what is required in your area.

After installation, your generator needs annual maintenance: an oil change, a load test (running it under load to make sure it works), and inspection of the battery and fuel system. This costs $150 to $300 per year and keeps the generator ready to start when you need it. If you skip maintenance, the generator may not start during an actual outage.

Insurance, tax credits, and money-saving options

Some homeowner's insurance companies offer a discount — typically 5 to 10 percent — if you install a backup generator, because it reduces the risk of damage from extended power loss (frozen pipes, spoiled food, sump pump failure). Call your insurance agent before you buy to ask whether a discount is available and what documentation they need.

Federal tax credits for backup generators have expired as of 2024, though state and local incentives vary. Some utility companies offer rebates if you install a generator that can be remotely controlled during peak demand periods. Check with your local utility and your state's energy office to see what is available in your area.

If cost is a barrier, a portable generator is a reasonable middle ground. A $1,000 portable generator covers basics during an outage and costs nothing to maintain until you use it. You can always upgrade to a permanent generator later.

Frequently Asked Questions

Can a backup generator power my whole house?

Yes, if it is large enough. A 20 kW or larger generator can power most of a typical home, including air conditioning and electric appliances. However, most people install smaller generators (7 to 12 kW) that power essentials and let you choose which circuits to run. Your electrician can install a sub-panel that lets you switch between generator power and grid power for different parts of your house.

What happens if I run out of propane during an outage?

Your generator stops. That is why propane generators require regular monitoring and refilling. Natural gas generators do not have this problem because gas comes from the utility line. If you choose propane, plan for a tank large enough to last several days, and check the gauge monthly during storm season.

How long does a generator last?

A well-maintained permanent generator lasts 20 to 30 years. Portable generators last 5 to 10 years with regular maintenance. Life span depends on how often you run it, how well you maintain it, and the quality of the unit. Annual servicing is the best way to extend life.

Do I need a permit to install a backup generator?

Yes, in most places. Building permits are required for permanent generators in nearly all cities and counties. Permits may support the installation meets electrical code and gas safety standards. Skipping the permit can cause problems when you sell your house or file an insurance claim. Check your local building department for requirements.

Can I install a generator myself?

You should not. The electrical work requires a licensed electrician to may support safety and code compliance. Gas line work requires a licensed plumber or gas fitter. Improper installation can cause electrical shock, gas leaks, or fire. Hire licensed professionals and keep all permits and inspection paperwork.