Power Play: Offering generators is smart business for building pros
When the grid goes down, permanent generators bring peace of mind to a growing number of homeowners.
At least one product category in the construction industry doesn't track with the economy, and that is standby generators.
Generac, a manufacturer in Wisconsin, reports that residential sales have more than doubled since 2005. Kohler, too, notes that today's market is much bigger than its earlier peak after the Gulf-area hurricanes in 2004 and 2005. With 10 Atlantic hurricanes in 2012, including Sandy, which slammed the nation's media center in New York City, "the awareness level of permanently installed generators has gone through the roof," says Dan Giampetroni, business manager of residential/light commercial for Kohler Generators.
Top forecasters are predicting an above-average 2013 hurricane season, making stationary generator installations a potentially significant service opportunity for builders and remodelers along the coasts. But it's not just bad weather driving this trend. The uptick in interest also correlates with an aging electrical grid and growing consumer demand for a consistent power supply, whether it's to charge mobile communications devices in our hyper-connected society or to operate medical equipment such as chair lifts and life support systems for elderly homeowners.
Case in point is Russell Electric, for whom generator installation is one of the largest growth areas despite its landlocked market in Bettendorf, Iowa. "We're not experiencing any one profile that demands a stationary generator; it's all kinds of people," says president Jeff Lanum. "The other day a mother installed a generator for her son; she didn't want to interrupt his gaming."
Kohler's newest generators have enclosures made of corrosion-resistant composite material. The company's 20,000-watt generator, the largest air-cooled option on the market, is the company's most popular model.
Whatever the motivation, most of Lanum's generator business involves retrofitting existing homes. But the equipment can be wired in during any phase of new construction, he says. Standby generators are installed on a concrete pad, much like an air conditioner, close to the main breaker box and at least 5 feet from doors and windows. Select electrical circuits are moved out of the breaker panel and into a transfer switch, which fires up the generator when the utility power fails. It runs on the house's propane or natural gas fuel source, eliminating the risks of relying on the local gasoline station in an emergency or storing flammable liquid inside the house.
Recent technology has made the units easier to operate and, in some cases, lowered acquisition costs. Generac's units accommodate propane or natural gas simply by turning an external orange knob an improvement over previous models that required the use of a screwdriver to remove one orifice and insert another. And the cold-weather starting mechanism is more robust. "Standby generators have to sit for long periods and, when they're needed, they can run two weeks at a time, so they have to be super-rigorous in terms of operation," says Russ Minick, Generac's executive vice president of residential products.
Roy Cranford, president of CDS Logistics, says that propane burns more efficiently than natural gas, creating more British thermal unit (Btu) output that can help with challenges like jump-starting the air-conditioning. "The older an air-conditioning unit, the harder it is to start," he says. "It's harder to start it than to run it."
"Generators are an option that will soon become standard."
These days, CDS Logistics, which distributes generators in Maryland, Virginia, Delaware, and Pennsylvania, is installing more air-cooled generators that can pick up every circuit in the house, though not all at once. "Ten years ago, if someone wanted a whole-house generator, we would have had to put in a liquid-cooled generator, which can cost $20,000," he says. "Now there's technology that bridges the gap between selected circuits and the whole house."
Kohler's newest generators have enclosures made of corrosion-resistant composite material. Giampetroni says the generator hookup on an average-size home requires a roughly 500-gallon propane tank. "Our most popular model is a 20,000-watt generator, the largest air-cooled option on the market." Both Kohler and Generac also offer remote monitoring software that allows owners to check the generator status on a smartphone or tablet.
Given the harshness of Mother Nature and our increasing dependence on electricity, Lanum predicts that in the not-too-distant future, permanent generators will be part of every new home. "The stage we're at now is similar to when air-conditioning was first introduced," he says. "They're an option that will soon become standard."
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