Generator on rent: How do genset rental services work in India?

You are probably familiar with services such as renting a house or renting a car but might not be so familiar with services such as renting consumer durables and furniture or even generator on hire. You must know that renting is popular among businesses because the expenditure incurred on renting is treated as revenue expenditure and written off in the same year. On the other hand, if you owned the assets then you incur capital expenditure that can only be amortized in future years based on prevalent statutory rules. Thus, businesses use generator rental as a strategic tool depending on the prevailing circumstances.

There are many aspects to generator rentals that the rental business owner, as well as the person or business renting a generator, must know. Let’s take a snapshot of generator rental services in India.

Why renting

Renting is a legitimate business activity that brings benefits to all the participants – the person or business using a generator on hire service as well as the rental business owner. For the rental business owner, renting is a revenue stream in the form of rent paid by the person renting the generator. On the other hand, for the person renting the generator, renting is treated as revenue expenditure to be written off in the same year. The person need not block up capital for purchasing a generator which could otherwise be used for other purposes. The renting business owner also takes care of all the miscellaneous activities associated with the generator such as maintenance, attending to breakdowns, servicing and keeping the generator in good working condition.

When to rent
The decision to buy or rent can be made based on the circumstances you are facing. These could include frequent, unscheduled and scheduled power cuts, need for additional power, breakdown of internal power systems and need for standby power. You will, in all probability, compare the cost of renting a generator with the cost of buying one and incurring expenses on running the generator. If your usage is minimal, it is likely you will end up renting a generator rather than buying one. This saves you from the headache of looking after an asset as well as incurring expenditure on its operation.

Prospects of the renting business
One of the reasons why generator renting business is attractive is its growth prospects. Its growth prospects stem from the relatively unreliable grid supply through most parts of India. Further, various applications in the residential, commercial and industrial establishments need either prime power or standby power to ensure continuity in operations. Applications in various sectors such as telecom, event management, healthcare, power utilities, offshore, oil and gas, mining, infrastructure, shipping, natural disasters and construction drive the generator renting business.

Benefits of renting
People and businesses using generator rental services benefit from the absence of ownership costs, quick and easy availability of generators for renting, hardly any maintenance issues, almost zero downtime, quick substitution, immediate scale up or scale down as required, flexibility to decide on configuration and conversion of renting into ownership after a minimum period of operation.

Generator rental services in India
The generator renting market is predominantly regional with a host of regional players offering generator rental services to different segments of users. Obviously, whenever there are high economic activities in a specific region, the generator rental business peaks.

A new trend is emerging in generator rental where large construction engineering and contracting firms set up their own equipment rental services which could include generator rental services as well.

The typical generator rental service provider offers a host of services. In order to provide these services, the rental service provider boasts high-class facilities that include:

• Depots wherever necessary
• Trained manpower
• Maintenance workshop
• Adequate spares
• Tie-up with leading generator manufacturers
• Ready-to-install containerized systems
• Most modern communication systems
• Highly innovative turnkey 24/7 service

While the generator rental services in India is predominantly regional or local, there are a few large rental entities that operate pan India and offer services on par with regional players. These entities have the advantage of tying up with large generator manufacturers. These types of rental entities can offer high-quality rental services with the backing of the large generator manufacturers they have tied up with. Because of their tie-up, these rental services providers are able to offer a wide variety of generators covering a wide range of KVA requirements.

Typically, generator rental services assess the requirements of the customer before recommending the appropriate generator to rent. They consider:

• Power required by assessing application, nature and quantum of load
• Offering generators with different kinds of fuels – gasoline, diesel, gas or hybrid
• Providing a network of smaller generators as opposed to one large generator
• Local statutory guidelines to be followed for rentals
• Availability of resources with the user

Based on the above, the rental company determines the price for renting the recommended generator and will offer you a rate on per day basis or for longer periods on per month basis which includes all functions pertaining to the smooth operation of the generator. The user bears the fuel cost which would be based on the nature of fuel used at the prevailing rates.

Reach out to Top Generator Dealers near you and get free quotes