The diesel O&M cost is a critical factor in HOMER analyses, and we know frustratingly little about it. For diesel generators, I typically assume an O&M cost of about 2 US cents per kWh at rated output. That would be $1/hr for a 50 kW diesel. HOMER assumes that the O&M cost per hour is independent of the power output, so that 50 kW diesel would cost $1 per hour of operation whether idling or running full blast.

HOMER calculates the annual O&M cost of the diesel by multiplying the hourly O&M cost by the operating hours per year. In a diesel-only system, that 50 kW generator would run full time and the O&M cost would be $8,760/yr. In a wind-diesel-battery system if it ran only 3,000 hours per year, its O&M cost would drop to $3,000/yr.