Asking the right questions about sizing, fuel type, compliance, service plans, testing and total cost of ownership will separate a reliable generator investment from an expensive mistake. Industrial generators are one of the most misquoted purchases on a project, and by the time a unit is on site it is too late to discover the sizing was wrong, the fuel storage is not compliant, or the commissioning test was never run.
- Generators undersized for motor inrush trip on start-up; oversized units run below 30% load and develop wet stacking that destroys the engine.
- Unscheduled downtime costs Australian SMEs an average of AU$12,700 per incident, and a serious supplier should put response-time hours in the contract.
- True total cost of ownership runs 2 to 3 times the purchase price over a 10-year life, with running expenses making up 40 to 60% of the total.
How to use the six questions
The six questions below cover sizing, fuel, compliance, service, commissioning and total cost of ownership. They apply equally to hire and capital purchase, and a competent supplier should welcome every one on paper before you sign.
Question 1: What size generator do I actually need for my load profile?
Why it matters
Oversized and undersized generators both fail. An undersized unit trips on start-up when motors, chillers or lifts draw their inrush current. An oversized unit spends its life at under 30% load, which causes wet stacking. Caterpillar and NFPA both warn that running a diesel generator below 30% of rated output for extended periods damages the unit.
What a good answer looks like
A competent supplier will not quote a size until they have a connected load schedule listing every motor, UPS, HVAC unit, lighting circuit and general power load in kW. They will ask for the single largest motor rating, because motors can draw six to ten times their running power at start-up. They will confirm your power factor assumption. Industrial sites typically operate at 0.80 power factor, so a 400 kW real load requires roughly 500 kVA of generator capacity, which is 400 divided by 0.80. They will ask for a step-load profile, including what starts simultaneously, what is sequenced, and the acceptable voltage dip and recovery time for sensitive equipment.
Expect a safety factor of about 1.25 on the final figure to cover load growth and keep the generator below 80% rated output in normal use. If you are hiring short-term, the same sizing logic applies. It is better to hire the right size than a cheaper undersized unit that trips your switchboard at first light.
Source: Caterpillar, Generator Set Underloading, Consulting Specifying Engineer, Generator Sizing Calculations and Turnkey Industries, Load Requirements for Industrial Facilities.
Question 2: What fuel type is right for my application and site?
Why it matters
Fuel choice determines runtime, emissions, regulatory burden, and whether the generator can even run on your site. Diesel, biodiesel blends and natural gas each suit different scenarios. Get it wrong and you will pay for it either at the fuel bowser, at the compliance inspection, or in refuelling logistics.
What a good answer looks like
A good supplier talks you through the trade-offs against your application. Headline differences in Australia are below.
| Fuel | GHG emissions vs mineral diesel | Engine compatibility |
| Mineral diesel | Baseline | Universal |
| B5, 5% biodiesel | About 4.5% lower | Standard pump fuel, universal |
| B20, 20% biodiesel | About 18% lower | Runs in standard diesel generators |
| B100, pure biodiesel | Over 99% lower | Needs seal and fuel line upgrades |
Supply matters too. Biodiesel has established supply chains across Sydney, Melbourne and Brisbane, with a new Victorian facility at Barnawartha supplying B5, B20 and B100 into south-east Australia. Natural gas removes on-site fuel storage and reduces emissions, but relies on mains gas availability and pressure, so it is rarely viable for remote sites. Diesel, including biodiesel blends, remains the standard for standby, prime, remote and temporary applications because fuel can be trucked and stored.
A sensible supplier also raises fuel management, such as polishing for long-storage applications, biocide in humid regions, and stabilisers when fuel sits beyond six months.
Source: Biodiesel Emissions & Compatibility, Caterpillar Australia, Renewable Liquid Fuels and Barnawartha Facility & Supply Chain.
Question 3: Does the installation meet all Australian compliance standards?
Why it matters
Non-compliant installations fail insurance claims, fail commissioning and expose duty holders under the Electrical Safety Act and state work health and safety legislation. Australia has specific standards for generator installation and for fuel storage, and a serious supplier will quote them by number.
What a good answer looks like
Expect the proposal to reference several key standards. AS/NZS 3000 (Wiring Rules) for all electrical installation work, which is the deemed-to-satisfy solution under the NCC 2025. AS/NZS 3010 for the installation of generating sets. AS 1940:2017 for on-site diesel storage, bunding and ventilation. AS/NZS 60079.10 for hazardous area classification around fuel storage zones.
On noise, regulation is state and council based, not federal. Each state EPA sets commercial noise limits, and councils can impose stricter limits through development approval conditions. Ask the supplier to specify the dBA at boundary target for your acoustic enclosure. A proposal that picks an enclosure without a site noise limit is written for someone else’s site.
Source: ECA WA, AS/NZS 3000 Wiring Rules, Fuelfix, AS 1940 Compliance, EPA Victoria, Commercial Noise and NSW EPA, Regulating Noise.
Question 4: What is included in the service and maintenance plan?
Why it matters
The cheapest unit on the table often comes with the weakest service contract. When a failure occurs at 2 am on a long weekend, what matters is who answers the phone and how many hours before a technician is on site. Unscheduled downtime costs Australian SMEs an average of AU$12,700 per incident.
What a good answer looks like
A strong service agreement puts numbers on every line. Ask for guaranteed response times in hours tiered by severity. For critical applications, 4-hour 24/7 response is standard. For business-continuity, 8-hour business-hours response is reasonable. Ask for preventive service frequency matched to run hours. Most diesel generators need service every 250 to 500 hours, with major inspections at 1,000 to 2,000 hours. Standby units typically use a calendar schedule, such as annual or semi-annual.
Confirm spare parts stocking in country, including filters, injectors, starter motors and alternator components. Confirm reporting, where every service visit produces a written report and the data is trendable. Confirm escalation and penalties, which means what happens if a response-time target is missed. Service credits or a replacement unit clause both count.
For hire scenarios, the provider owns all maintenance. Check the contract for an SLA on replacement generator availability if a unit fails outside the response window.
Source: Server Room Environments, Warranties, Service Contracts and SLAs.
Question 5: How will the generator be tested and commissioned?
Why it matters
A generator that has never been run at full load is an unproven generator. Load bank testing is the only way to validate that the engine, alternator, cooling, fuel and control systems can sustain rated output. It also burns off the carbon deposits that accumulate during low-load running, which is why annual load bank testing is a maintenance requirement, not just a commissioning task.
What a good answer looks like
Commissioning should be contractually tied to a load bank test pass, not to a delivery date or invoice milestone. The supplier should commit to a full-load run of at least 60 minutes at 100% rated kW, with frequency drift within the 1% tolerance allowed under ISO 8528-6. They should commit to a step-load test that matches your site’s largest motor or UPS load, provide a factory acceptance test report where applicable, plus a site commissioning report with measured kW, kVA, voltage regulation, frequency stability, fuel consumption, exhaust temperatures and vibration readings, and provide written sign-off against AS/NZS 3000, AS/NZS 3010 and ISO 8528.
Load bank testing should also appear in the ongoing service schedule. Standby units should be tested annually, and critical infrastructure such as data centres and hospitals more frequently. If a supplier cannot tell you how commissioning will be tested, they cannot tell you whether the unit will work when you need it.
Source: Avtron Power, Testing Diesel Gen-sets to ISO 8528 and JC Davis Power, Generator Load Bank Testing and Commissioning.
Question 6: What does total cost of ownership look like over 5 years?
Why it matters
Purchase price is the smallest number on the bill. True total cost of ownership is typically 2 to 3 times the purchase price over a 10-year life, with running expenses accounting for 40 to 60% of the total. Buyers who apply a formal TCO analysis report up to 25% better cost control on equipment decisions.
What a good answer looks like
The supplier should give you a 5-year TCO model, not a single capex number. Useful benchmarks are below.
| Cost line | Typical range, commercial 100 to 500 kW |
| Capex, unit and install | $60,000 to $250,000 |
| Fuel at 75% load | About 26.5 litres per hour per 100 kW |
| Scheduled service | Every 250 to 500 hours |
| Downtime per incident | About $12,700 average for Australian SMEs |
A good TCO comparison shows hire versus purchase against expected usage. Industry rule of thumb is that if you need a generator more than 60 to 70% of the year continuously, buying wins on cost. Below that, hiring is usually cheaper and shifts maintenance risk to the provider. Operational overheads have risen about 5.3% annually over the past three years in Australia, so build an escalation factor into the model.
Source: Easy Asset, True Cost of Capital Equipment Australia, and True Gear, Generator Installation Cost.
Red flags to watch for
If you see any of the following in a proposal, keep shopping. Sizing without a load schedule means the supplier cannot name your largest motor and cannot size your generator. No Australian standards referenced means the proposal does not cite AS/NZS 3000, AS/NZS 3010, AS 1940 and ISO 8528 by number. Commissioning without a load bank test is a red flag because delivery is not commissioning. A service plan with no response-time hours is not an SLA. Capex-only cost comparison with no fuel, maintenance or downtime figures is not a real cost comparison.
Frequently asked questions
How much does it cost to hire an industrial generator in Australia?
Hire rates in 2025 to 2026 range from approximately $150 to $300 per day for medium commercial units and $1,100 to $2,200 per day for large construction or industrial generators. Rates vary with unit size, hire length and location.
What size industrial generator do I need?
Start with a connected load schedule in kW, apply a diversity factor of about 0.80, divide by your power factor of typically 0.80 for industrial sites, add the largest motor starting kVA, and multiply by a 1.25 safety factor. A qualified supplier will do this calculation with you before quoting.
Is biodiesel suitable for standby generators?
B20 biodiesel runs in standard diesel generators with no engine modifications and reduces greenhouse gas emissions by approximately 18% compared with mineral diesel. B100 delivers over 99% lower emissions but typically needs seal and fuel line upgrades. For long-storage standby applications, confirm the supplier’s fuel management programme, because biodiesel blends degrade faster than mineral diesel.
How often should a standby generator be load bank tested?
Annually at minimum, in line with ISO 8528-6 and NFPA 110 guidance. Critical infrastructure such as data centres and hospitals should test more frequently. Load bank testing also burns off carbon deposits from low-load running, so it doubles as preventive maintenance.
Do I need council approval to install a commercial generator?
In most Australian jurisdictions, yes. Noise limits are set by state EPAs and can be overridden by council development approvals. AS 1940 governs fuel storage, AS/NZS 3000 governs the electrical installation, and many councils require acoustic assessments at the property boundary. Your supplier should manage these approvals as part of the installation scope.
Book a site assessment with Green Power Solutions
The six questions above are the minimum any serious industrial generator supplier should welcome. Our team works across construction, mining, data centres and events, covers generators, hybrid lighting, tank storage and load bank testing, and will answer every question on paper before you sign.
Call 1800 GO GREEN (1800 464 7336) Monday to Thursday 7:30am to 3:30pm or Friday 7:30am to 3:00pm, or request a quote and we will respond on the next business day.