As extreme weather events surge through each season, resulting in power outages and other loss of services, homeowners are turning to standby generators in record numbers. The demand for backup power has been further impacted by utility-planned rolling blackouts to mitigate grid reliability and safety concerns in many geographic locations.
The average duration of power outages has more than doubled during the past five years, according to the U.S. Energy Information Administration (EIA), attributed to worsening weather conditions combined with archaic infrastructure. These concerns are further compounded by the ongoing disagreement between local governments, regulators, and utilities about who should fund grid modernization investments. Utilities have typically wanted to recover the costs through a traditional ratepayer model, which conflicts with the regulatory and ratepayer concerns of constraining energy costs.
When comparing blackout frequency and duration around the world, the United States experiences more frequent outages than other developed countries. This is not surprising given significant portions of the electric grid were built more than 70 years ago, with the oldest power lines dating back to the 1880s. The statistic becomes even less startling when considering the 50-year life expectancy of many grid components. While electric utilities have more recently shifted their focus to modernization efforts, overall systems remain out of date and in desperate need of repair. The recently passed infrastructure bill incorporates grid modernization investments intended to counteract some of the persistent deferral of maintenance and upgrade.
Extreme weather events are the leading cause of power outages, according to the Department of Energy, and a Climate Central analysis found there was a 67 percent increase in weather-related power outages, with 59 percent caused by heavy rains and thunderstorms, 20 percent by ice storms and cold weather and 2 percent by extreme heat and wildfires.
Generac, one of the nation’s leading manufacturers of generators, has been vocal in their inability to manufacture their generators fast enough to keep up with the growing demand. Backlogs are growing rapidly and reaching up to 10 months out despite the company expanding its operations. A statement by CEO Aaron Jagdfeld from a recent expansion-related press release reinforces the ongoing issues facing the energy sector: “Generac has experienced tremendous growth over the past decade as the combination of an aging grid and extreme weather are resulting in more frequent and longer lasting power outages, and that success has only intensified over the last 18 months with more people needing backup power at home where they’re doing everything from working to learning to shopping.”
The increased interest in, and reliance on, standby generators is creating a growth opportunity for natural gas utilities at the very moment decarbonization efforts are challenging the role they should play in powering homes and businesses. Homeowners’ preference for the convenience of connecting their standby generators to natural gas is undeniable, especially when considering the always-available supply of fuel it provides, rather than having to risk running out of fuel when relying on delivery of propane or diesel. Advancement in standby generator technology is also opening the door to leveraging natural gas generators as distributed energy resources (DER).
Generac has been a leader in this new DER generator space, evolving their backup power solutions to add renewable options alongside their core fossil fuel-based solutions, along with smart grid readiness capabilities to enable the sale of power back to the grid during times of peak demand. This approach evolves beyond the gas generator-based demand response programs some utility demand-side management teams have implemented for targeted load management and can be instrumental in creating virtual power plants and micro grids.
Interest in standby generators is high and growing on a global level, but, when segmenting by regions, the North American standby generator market holds the largest market share at nearly 34%. This market is expected grow at a compound annual rate of 3.7% during the period of 2021-2025 and reach $6.339 billion.
As reliance on standby generators increases, so does the need for maintenance and repair services. A HomeServe study conducted in August 2021 identified that 41% of standby generator owners experienced an issue within the prior 12 months, ranging from leaks and mechanical concerns to total failure to start. While some of these owners were able to resolve their issues through existing warranties from their generator’s manufacturer or dealer, 44% were left paying for their repair out of pocket. But cost wasn’t the only concern of homeowners; many were unsure who to call and 30% of respondents reached out to their utility for assistance.
HomeServe recently developed its Standby Generator Maintenance and Repair Plan to create ease for homeowners, ensuring their standby generators are appropriately maintained and tested, so they are available when needed most. A partnership with HomeServe can alleviate the increased call volume that occurs during severe weather events and power outages and enable utility customers to resolve their concerns rapidly. To learn more about how HomeServe can help utilities protect their customers, contact us.