Running a generator on natural gas costs $0.05–$0.15 per kWh, making it the cheapest fuel option in 2026. Gasoline is the most expensive at $0.15–$0.30 per kWh, with propane ($0.12–$0.25/kWh) and diesel ($0.12–$0.22/kWh) falling in between.
These costs matter more than you might think. During a 72-hour power outage, fuel costs alone can range from $40 on natural gas to over $300 on gasoline — and that is for a modest 10kW load. Choosing the right fuel type can save you hundreds of dollars per outage event and thousands over the generator's lifetime.
How Generator Cost Per kWh Is Calculated
The formula for calculating your generator's cost per kWh is straightforward, but most online sources get it wrong because they ignore generator efficiency.
Cost per kWh = Fuel Price per Unit ÷ (Fuel Energy Content × Generator Efficiency)
Here are the variables you need for each fuel type:
Generator efficiency is the critical variable. A generator rated at 10kW does not convert 100% of fuel energy into electricity. Small portable generators typically operate at 20–25% thermal efficiency, while large diesel standby units can reach 30–35%. The rest is lost as heat, noise, and exhaust.
Generator efficiency drops at partial loads. A 20kW generator running a 5kW load (25% capacity) operates far less efficiently than the same generator at 15kW (75% capacity). The sweet spot for fuel efficiency is 50–80% of rated capacity.
2026 Cost Per kWh by Fuel Type
Using current average fuel prices across the United States in early 2026, here is exactly what each fuel costs per kilowatt-hour of electricity produced.
*kWh per unit assumes average generator efficiency for that fuel type.
Natural Gas: The Clear Winner
At $0.06–$0.12 per kWh, natural gas costs roughly 50–70% less than gasoline to produce the same amount of electricity. If your home has a natural gas connection, a NG standby generator is almost always the most economical choice over time.
Natural gas also has a unique advantage: the supply is continuous. You never need to refuel or schedule deliveries. The gas utility remains pressurized during power outages in the vast majority of situations.
The downside is that natural gas generators produce roughly 10% less power than the same generator running on propane, due to lower energy density.
Diesel: Best Efficiency, Mid-Range Cost
Diesel generators are the most fuel-efficient, converting 25–35% of fuel energy to electricity compared to 20–30% for gasoline. This efficiency advantage partially offsets diesel's higher per-gallon price.
At $0.14–$0.22 per kWh, diesel is significantly cheaper than gasoline and competitive with propane. Diesel generators also have longer service lives — 20,000–30,000 hours vs. 10,000–15,000 for gas engines.
Propane: Best Balance
Propane lands in the middle at $0.15–$0.25 per kWh. It stores indefinitely (unlike gasoline), burns cleaner, and is available in bulk deliveries. A 500-gallon tank costs $1,400–$2,000 to fill and provides 150–300+ hours of runtime depending on generator load.
Propane is the most popular fuel for standby generators in areas without natural gas service.
Gasoline: Most Expensive, Most Common
At $0.22–$0.30 per kWh, gasoline is the most expensive generator fuel. It is also the most accessible for portable generators and the easiest to find — except during widespread outages when gas stations lose power.
Gas prices fluctuate seasonally and spike during severe weather events, exactly when you need your generator most. During Hurricane Ian in 2022, gas prices in parts of Florida exceeded $5/gallon.
Cost Comparison: Real-World Outage Scenarios
Let's run the numbers for three common outage scenarios using 2026 average fuel prices.
Real-World Example — Texas Winter Storm: During the February 2021 Texas power crisis, many homes lost power for 3–5 days. A homeowner running a 10kW gasoline portable generator for 96 hours (4 days) at an average 7kW load burned approximately 80 gallons of gasoline. At $3.50/gallon (winter Texas prices), that cost roughly $280 in fuel alone. The same outage on natural gas would have cost approximately $50–$70.
Real-World Example — Hurricane Season Prep (Florida): A homeowner in Tampa runs a 22kW propane standby generator with a 500-gallon tank. During a 72-hour outage at ~12kW average load, the generator consumes roughly 135 gallons of propane. At $2.80/gallon, that is $378 for three days of whole-home power. With natural gas, the same electricity would cost approximately $65.
Real-World Example — Weekly Testing Cost: Most standby generators run a 30-minute test weekly. A 20kW natural gas standby generator at 50% load during testing uses about 1.5 therms per test. At $1.20/therm, that is $1.80/week or about $94/year in fuel for testing alone. On propane, the same weekly test costs roughly $3.50/week or $182/year.
How Load Affects Cost Per kWh
Generator fuel consumption is not linear with load. Running at 25% capacity is disproportionately wasteful.
At 25% load, you pay $0.64 per kWh — three times more than at full load. This is why properly sizing your generator is critical. An oversized generator sitting at 25% load all day will burn significantly more fuel than a right-sized unit at 60–75% load.
An oversized generator doesn't just waste fuel — it can also "wet stack." This happens when a diesel or propane generator runs at low load for extended periods, causing unburned fuel to build up in the exhaust system. Wet stacking reduces performance and can cause permanent damage.
Generator Electricity vs. Grid Electricity
How does generator electricity compare to the power you normally get from the utility?
Natural gas generators actually produce electricity cheaper than the average grid rate in many regions. This means during extended outages, you are spending less on fuel than you would have on your electric bill for the same usage.
Gasoline and propane generators cost significantly more than grid power, reinforcing the fact that they are emergency-only power sources, not grid replacements.
Generator Fuel Cost Calculator
Estimate your generator fuel costs for any outage duration and load level.
Tips to Reduce Generator Running Costs
You can cut your fuel costs by 20–40% with smart practices.
Right-size your generator. Running a 22kW generator to power a 5kW load wastes 30–50% more fuel than a 10kW unit at the same load. Load management modules let a smaller generator handle large homes by cycling appliances.
Maintain optimal load. Keep your generator running between 50–80% of rated capacity. Turn off unnecessary loads and stagger high-draw appliances.
Use a programmable thermostat. During outages, set your AC to 78°F and heat to 65°F. Each degree of AC adjustment saves roughly 3% on generator fuel.
Insulate and seal. A well-insulated home retains temperature longer, meaning your HVAC runs less and your generator burns less fuel.
Maintain your generator. Dirty air filters, old spark plugs, and low oil levels all reduce efficiency. A well-maintained generator uses 5–10% less fuel than a neglected one.
Consider dual-fuel. Dual-fuel generators (gasoline/propane) let you switch to propane for lower per-kWh costs when gasoline prices spike.
Key Takeaways:
- Natural gas is the cheapest generator fuel at $0.06–$0.12 per kWh in 2026.
- Gasoline is the most expensive at $0.22–$0.30 per kWh — roughly 2–3x the cost of natural gas.
- Diesel offers the best fuel efficiency (25–35%) but fuel prices are moderate.
- Generator cost per kWh increases dramatically at low loads — right-size your unit.
- During a 72-hour outage at 10kW, fuel costs range from $43 (natural gas) to $216 (gasoline).
- Proper maintenance and load management can reduce fuel costs by 20–40%.
Frequently Asked Questions
Related Articles
How Long Do Generators Last? (Running Hours Guide by Type)
KEEP+ • 11 min read
How Long Will a Generator Run on 5 Gallons of Gas? (Runtime Chart)
KEEP+ • 11 min read
How Many Amps Does a Generator Produce? (Chart by Wattage & Voltage)
KEEP+ • 12 min read
Portable Generator Safety: CO Poisoning Prevention Guide (2026)
NEW • 16 min read