Cogeneration systems are extensively used in Malaysia to produce power as a primary source. However, in the event of cogeneration system failure, the customer or the client are forced to use a redundancy to avoid power interruptions. There are two methods commonly used as a backup in the cogeneration systems which are Generator set and public utility. In order to choose the best redundancy for a particular cogeneration system, it is essential to evaluate the economic benefit analysis by considering several factors such as Maximum demand charge, installation cost and Discount interest. In the evaluation of economic benefit, this study identifies the number of failure and associated downtime using reliability and availability approach, and then present value method was applied. The result shows that the usage of public utility as redundancy is beneficial if the cogeneration system operates within five years period. However, if the cogeneration system operates more than five years, generator set option would be a better option to minimize the total cost. This research also addresses the effect of various factors such as installation cost, maximum demand charge, fuel cost, discount interest rate and production capacity. In general, the output of the research would be beneficial for the plant operator to select the appropriate redundancy option based on the economic advantages.