Provided is an electric generator which is capable of being used indoors. The electric generator employs the use of a cooling system which injects water directly into the engine through a domestic water pipe. The cooling system does not require the use of a water pump, radiator, cooling fans, alternator or any associated belts. The electric generator also employs the use of an exhaust system which allows for the passage of cooled exhaust gases and water from the engine in a safe manner without having exhaust fumes enter the home and without posing a fire hazard to the home or building structure. Further advantages of the indoor electric generator are discussed herein.