New Gaseous Fueled Gensets Offer a Better, More Affordable Solution

As major power outages occur with increasing frequency, the need for standby electricity has never been more apparent.   These widely reported events, occurring time and again in various places, are a wakeup call of sorts — a reminder to everyone that a blackout can happen anywhere, anytime.   Those directly affected, who see their power interrupted for hours or days, are naturally the most concerned.   Everyone else learns about them through the ubiquitous media, which is filled with stories that describe millions of customers being without power for days.

Power Outages Can Occur Anywhere

Naturally, certain geographic areas are more prone to an outage because of the likelihood of severe weather.   The eastern seaboard and Gulf states instantly come to mind because of hurricanes that bring lightning, tornadoes and high winds along with them.   The succession of storms that occurred during 2003 and 2004 amply demonstrated the devastating power of such natural disasters and the extensive, extended power outages that often occur in their wake.

“People who live elsewhere may believe they are unlikely to experience such problems, but in fact no one is immune to the possibility of a power outage,” says Mike Carr, manager of marketing communications at Generac Power Systems, Inc.

“Severe weather, likely or not, can occur anywhere on the continent, but that is not the only threat to utility-supplied power.   Though weather is the #1 cause of an outage, it still accounts for only 38% of all power interruptions.   That really shows that the need for backup power is universal.”

An Untapped Market For Standby Power

Businesses are especially vulnerable to a lengthy power outage, which can be extremely costly.   Employees are idled, computers and cash registers stop working, production processes are interrupted, and refrigerated items spoil.   The longer the blackout, the more devastating its effect upon the bottom line.

According to a study by an independent research firm, 80% of small businesses experienced an outage last year.   Of those, 29% were without power for more than eight hours and 19% for more than sixteen.   Despite this ongoing threat, 62% of small businesses do not have any type of backup power supply.   Even more remarkably, 75% of business owners say that electrical interruptions are a threat to their business, but only 22% feel very prepared to deal with an outage.   Obviously, there is a huge and largely untapped market for standby power that presents an extraordinary opportunity to manufacturers, sellers and installers of these products.

A New Solution For Small Business

Generac, the #1 manufacturer of automatic home standby generators, is tackling this market head-on in 2005.   By leveraging its success in the residential segment — where the company sells more systems than all other manufacturers combined — Generac plans to make its new commercial line the best solution for small businesses that need backup power.   With this line available to electrical distributors and electrical contractors, these products offer significant profit opportunities for those who sell and install them.

“These offerings include an array of gaseous-fueled generators that range in output from 30 to 150 kilowatts, making them ideally suited for a wide variety of small and medium-sized businesses,” Carr says.   “Retail enterprises such as drug stores, restaurants, gas stations, convenience stores, supermarkets and other kinds of storefront businesses will find them particularly cost-effective compared to previous backup power options.   For those who have not yet invested in standby power generation because of the cost, the economics will now be compelling.”

Cost Effective Business Protection

By making the new products especially affordable, Generac is bringing standby power within reach of an expanding market.   For many enterprises, it’s simple to compute the payback by comparing the installed price of a standby power system with the hourly loss of sales dollars during a blackout.

Although the dollar amounts are merely representative and may vary, the point is obvious — a standby generator could pay for itself during the first extended outage, while still providing decades of reliable service afterward.   For any business that is vulnerable to a loss of power, it’s an easy cost / benefit decision.

Quieter By Design

Considerable attention has been devoted to reducing the noise characteristics of these generators.   All models feature a sound attenuated enclosure designed and manufactured by Generac.   Internally, the design, selection and integration of fans and radiators have been given special attention to maximize cooling effectiveness and reduce fan noise.

Because generators typically run for fifteen to twenty minutes once a week during a self-exercising routine, noise outputs during that time may be of concern.   To obviate harsh or unpleasant sound emissions, Generac has developed its new Quiet-Test™ exercise feature.

The Quiet-Test routine is initiated whenever the genset is operating while normal utility power is present.   The generator starts up and operates at a reduced speed while exercising, reducing sound output by as much as 15 decibels for units that normally run at higher speeds under load.   This enhancement is especially beneficial in commercial areas where retail stores are clustered and anywhere that residences are nearby.

Modular System Capabilities

Two models in the line (100 and 150 kW) offer an optional paralleling digital controller.   That configuration gives them onboard paralleling capability, making them fully compatible as elements of a Generac Modular Power System (MPS).   This means that multiple gensets of this or any other MPS type can be easily combined and paralleled to create higher output systems.

This capability is particularly effective in creating MPS natural gas systems that cost significantly less than large, single engine alternatives.   The MPS approach also provides additional benefits at no extra cost — redundancy, scalability, flexibility and availability.

Gaseous-Fueled Gensets — Better Than Diesel

For standby power systems, gaseous fuels — natural gas or liquid propane (LP) vapor — are vastly superior to diesel fuel, for a variety of reasons.

Disadvantages of Diesel Fuel

• Diesel tanks require refueling, which may be problematic during an extended power outage
• Diesel fuel requires storage on-site in expensive double-walled tanks
• Placement of a diesel fuel tank will require local permits
• On-site fuel storage may be limited by local ordinance
• On-site diesel fuel presents a risk of spillage
• Diesel fuel requires maintenance to prevent deterioration over time
• Underground diesel storage tanks are subject to increasingly stringent restrictions
• Diesel fuel emits an odor advantages of GASEOUS FUEL
• Natural gas is delivered reliably and continuously underground
• Natural gas demand drops significantly during a power outage, assuring more than adequate supply
• Historically, natural gas has cost less than diesel fuel
• Gaseous engines are quieter than diesel engines in terms of noise, vibration and harshness
• Spark ignited engines start more easily than diesel engines in cold climates
• Gaseous engines emit far fewer pollutants than diesel engines and are environmentally friendly

UL Listed Products

The new commercial products are UL2200 Listed.   The UL2200 Listing is a comprehensive safety standard encompassing the design, construction, and performance of stationary engine generators producing up to 600 volts.   It is also an independent verification of the electrical output of such generators and ensures that they are capable of producing power equal to their claimed kilowatt rating.   Not all manufacturers are able to offer it, making their kilowatt output ratings questionable without it.

Profit Opportunities for Electrical Businesses

Generac is offering the new products through a number of sales channels, including electrical distributors.   The company began actively supplying this market in September of 2003 by offering an array of its top-selling residential products along with an assortment of commercial and light industrial gensets and transfer switches.   That marketing initiative has been very successful, resulting in increased sales for the manufacturer, the distributor and the contractor.

“The new line is going to further accelerate the existing sales program,” says Greg Berlin, Generac district sales manager.   “It’s really been a profit booster for electrical distributors and contractors who have been selling and installing these systems.   The residential products have been driving this business, but the program includes units up to 200 kilowatts so there’s an even greater profit opportunity on the higher end equipment.”

Five years ago, the Y2K craze spurred an unprecedented demand for generators that propelled Generac sales to new highs.    In 2003 and 2004, a succession of high-profile natural disasters sent the demand for standby power products to even higher levels, helping Generac to exceed its 1999 results.

“This product category has really taken off,” Berlin notes.   “There’s an increased awareness of the need for standby power, whether it’s for a home or business.   We’ve been gratified by the results we’ve seen so far among those who sell and install our products, but we’re only just scratching the surface.   The price of these systems is dropping while the demand is increasing, and you can’t ask for a better combination than that.   Those electrical distributors and contractors who aren’t involved with these products are missing a tremendous profit opportunity.   Fortunately, it’s not too late for them to get onboard, because so much of the market is still untapped.”

Electrical contractors are in an ideal position to profit from both the sale and the installation of standby generators.   “Some contractors are content to just install these systems,” says Berlin, “but many of them realize that by selling them also, they can double their profit.   Offering a package to their customers at an installed price is a great way for them to really reap the full benefit.”

Educating the Contractor

To better equip contractors with product knowledge and installation know-how, Generac is currently offering a nationwide training initiative that is free to installing contractors.   Its half-day session, entitled “Maximizing Your Profitability In Standby Power System Installation,” covers installation techniques and current technology and features a live generator demonstration.

“As a manufacturer, we want to make it as easy as possible for contractors to install our equipment,” says Generac’s Mike Carr.   “Our seminar covers not only residential generators and transfer switches, but also the commercial products that will allow contractors to confidently take on larger and more profitable jobs.   We also cover current trends and technologies in the industry that will help contractors in advising their customers regarding the many options available in creating backup power solutions.”

Rated Power Outputs
Natural Gas or Liquid Propane Vapor Fuel 30, 40, 50, 55, 70, 80, 100, 130, 150 kilowatts Single phase outputs, 120 / 240 V (up to 70 kW) Three phase outputs, 120 / 208 V, 277 / 480 V (70 kW and above)
Business	Lost Sales per Hour	Typical kW	Approximate Installed Generator Cost	Payback Hours
Gas / convenience store	$445	30	$9,800	22
High volume restaurant	$705	50	$11,400	16
Drug store	$1,400	70	$13,500	10
Supermarket	$3,510	150	$22,670	6