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How To Start Generator Rental Business in Nigeria or Africa: The Guide

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How To Start Generator Rental Business in Nigeria or Africa: The Guide

How To Start A Lucrative Generator Rental Business In Nigeria Or Africa: The Complete Guide | Image: Jiji

Given the modern need for power generators for industrial and commercial purposes, most firms cannot do without them for daily and occasional purposes. As a matter of fact, generators have become a key component of most modern societies irrespective of the situation of the national power supply. Even where the supply of electricity is stable, there is a need for stand-by backup generators. The narrative is the same in Nigeria, as more and more mega-companies continue to spring up in various sectors of the economy. However, not all industries, companies and businesses can afford to procure mega generators to run their businesses. For others, carrying these generators about to places where their services are required, is impossible. This is where generator rental becomes a key necessity.

Generator rental business is fast becoming a trend in urban societies where heavy machinery is used. According to Transparency Market Research, the global generator rental market was valued at over $6b in 2018 and has been projected to hit $10b by 2026 at a CAGR of 5.86%. This is a testimony to how much power is consumed and more directly, how willing people, businesses and industries are to temporarily rent power generators rather than purchase their own units.

At the moment, the Middle East and Africa are the two regions with the biggest generator rental market, and they are expected to grow to about US$1.7b by 2027. This is due in part to the new developmental projects in countries in the Middle East, such as Saudi Arabia, Qatar, and the UAE, among others. The absence of a stable power supply and the development of industries in the region are also major determinants of this market size. However, due to the carbon emissions and other associated health hazards, countries of the world set regulations to the use of power generators. The United States and Canada have a target of 20% reduction in the use of power generators while South Africa have set 30%.

In Nigeria, the situation is a little different. The nation’s economy requires power supply to drive its growth, but the national electricity grid is far from meeting the national daily demand for power. Major cities and towns such as Lagos, Port-Harcourt, Abuja and Benin City, where there are lots of industrial companies, record the highest market for power generator leasing in Nigeria. In addition, individual construction companies, mining companies, drilling companies, etc. rent diesel-powered generators from 20KW and above.

As a result, the high demand for power generator units leaves a big opportunity for the generator rental business in Nigeria. As industrial companies, for example, move from place to place, they prefer to avoid generator transportation and installation costs. So, they fall back on generator rental services for their operations. The generator rental business is, no doubt, capital-intensive, but it is a highly lucrative business opportunity for any entrepreneur in Nigeria or other parts of Africa to invest in. Here is a detailed guide on how to set up a successful power generator business in Nigeria or Africa.

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What Is A Power Generator?

A power generator is a device that converts chemical or mechanical energy into electricity. Generators operate on different energy sources. There are the diesel generators, biofuel generators, propane generators and natural gas generators, and they range in capacity from as small as 10KW to thousands of KW. Generators are used as backup devices in most areas, but for places where the electricity grid is a luxury, they are the main source of power for homes, schools, hospitals, companies, and literally every other organisation where electricity is needed.

 

What Is A Generator Rental Business?

A generator rental business describes all the process involved in making power generator sets available for use by individuals, firms or companies on a temporary basis. This involves procuring the gensets, transporting, installing and maintaining the devices, among other services. Most generator rental companies use diesel-powered generators because diesel is easier to procure and less expensive than the other energy types.

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Business Opportunities In Generator Rental Business In Nigeria And Across the World

1). Operation Services:

Large capacity generators are used for heavy-duty functions such as powering massive office buildings, construction devices, and so on. These generators require expert personnel to operate and handle them. Although some of the power generators can be operated by unskilled manpower with little training, it is highly recommendable to leave the operation to professionals or individuals trained in the field.

2). Repair And Maintenance Services:

Power generators require constant maintenance and repairs in order to perform optimally. Repairing and maintaining generator sets creates employment opportunities for engineers, technicians and related experts.

3. Transport Services:

Generator retail companies have to see to the delivery of the generator sets to the companies, individuals or firms where they are needed. They are often transported in trucks, which need trained drivers to manoeuvre. Transporting the devices to the clients require the service of transport workers and the workforce to move the heavy generators.

4. Safety Kit Production:

Heavy capacity generators used for rental services involve the use of safety materials. Such materials include insulator gloves, boots, etc. to prevent shocks and electrocution. The production of such safety materials creates job opportunities for the personnel in charge.

 

Facts And Benefits Of Power Generators

  • Generators are the soul of business in most modern societies where electricity supply is erratic.
  • Generators operate on different types of fuel.
  • The most common generators are the portable home generators that use petrol as fuel.
  • A power generator could be a saving grace when there is a power outage in the middle of work.
  • In times of complete blackout, a generator is a ready backup.
  • They are essential devices during bad weather such as extreme heat.
  • North America, the Middle East and Africa are some of the regions where generator rental service is on a high.
  • In Nigeria, generator rental thrives better in major industrial cities such as Lagos, Abuja, Benin City and Port-Harcourt.
  • It protects against health challenges that would otherwise arise from adverse weather conditions.
  • Generators are also used at home to generate energy for water supply.
  • Standby industrial generators can start automatically following a power cut, to provide you with uninterrupted power supply.
  • Industrial generators can work over a distance without sacrificing efficiency.
  • Generators keep your home safe, secured and operational always.
  • The first electric generator ever was the Faraday disc.

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Types Of Power Generators

1). Portable Generators:

Portable generators are the common generator types used at home and in small offices or business sites. They range from a capacity of 5KW to 50KW.

2). Inverter Generators:

Inverter generators are the types of generators that use rectifiers to convert AC power to DC power. The electronic circuit system is much more advanced than the portable generators, and they can self-adjust to provide just the suitable KW of energy needed at each point in time.

3). Standby Generators:

Standby generators are the preferred options in mega business buildings. They do not require setup at each time of use. Instead, they provide continuous current by automatically switching to provide power after an electricity outage. Standby generators use both natural gas and liquid propane.

 

How To Start A Generator Rental Business In Nigeria: A Step-By-Step Guide

1). Draft A Business Plan:

Drafting a professional business plan is the first step of many miles in starting any business venture. It is at this point that you determine vital factors such as your startup cost, budget, the type of generators to rent, how to mitigate possible challenges, location, etc.

2). Get A Business Site:

A business location is a significant determinant of the success of your power generator rental business. It is only expected that you situate your company site in a city or major town. More so, it has to be at the heart of activities for the sake of awareness, proximity to companies that rent generators as well as other associated modern facilities.

3). Buy Generators:

Having situated your company at a considerably favourable location, you should purchase suitable generator sets. The type of generators to buy depends mainly on the scale of your business. It is advisable to procure generator sets of different capacities since your potential clients will have various capacity need and energy load.

4). Employ Labour:

A generator rental business requires the services of various skilled and unskilled personnel for different tasks. The size of your staff depends on the number of generators available, among other factors.

5). Run Ads:

The final step in kick-starting your generator rental business is to create awareness in the locality where the company is situated. You could use radio jingles, TV stations and other means available in the environment.

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Challenges Of Generator Rental Business In Nigeria

  • High startup cost
  • Difficulty in importing reliable generator sets
  • Insufficient loan facilities for generator rental companies
  • Limited government support for generator rental businesses.
  • Unfavourable policies and regulations guiding the use of a generator.
  • High cost of maintenance and service of generator sets.
  • Risks, hazards and electrocution are commonplace in generator use.

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To Sum It Up

Generators are in constant demand at domestic and industrial settings due to the absence of stable electricity grid in the country and continent at large. The generator rental business in Nigeria can be a lucrative and profitable venture to start-up, due to its vast market demand and on your ability to build a wide network. If you’re looking for a lucrative business to venture into, the generator rental business in Nigeria is a great option to explore.

 

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What are your thoughts on how to start a generator rental business in Nigeria? Let me know by leaving a comment below.



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