Fearing long power outages—plus a refrigerator full of spoiled food and a flooded basement—more and more storm-weary Americans are purchasing home generators. But despite the rapid sales growth of generators, it’ll still be lights out for most households should a major storm hit.
Sales of generators have surged in recent years. Generac, which has about 70% of the residential generator market, reported that net sales grew 45% to $347 million from the second quarter of 2012 to the same period in 2013 (after seeing nearly the same net sales growth from 2011 to 2012). And the bulk of that growth came from its home generator division, says Aaron Jagdfeld, the company’s CEO. To support the increased demand, the company has since 2011 added nearly 1,000 dealers of residential and light commercial generators to its network. Kohler, another big player in the market, also says it has experienced a “significant” surge in sales in the past couple of years. In the northeastern U.S., in particular, there was a lot of new demand surrounding recent hard-hitting storms like Sandy and Irene. And generator sales are expected to keep growing, in part because of the increasing number of severe storms expected in coming years, analysts say, as well as the growing aging population, which tends to be less tolerant of days spent without power.
Indeed, each time a storm hits, people purchase generators in droves. Right before and immediately after the storm, people tend to purchase portable generators; once the debris has cleared, many purchase “standby” generators, which are more powerful than portable generators (and more expensive) and are installed in the home. Generator manufacturer Briggs & Stratton says it saw a double-digit increase in sales of portable generators in the weeks right before and after Hurricane Sandy and then saw double-digit sales increase for its standby generators over the 11 months following the hurricane. Trends like this aren’t surprising, given that during Hurricane Sandy three in four people in the Connecticut, New Jersey and New York areas lost power from their utility company for at least one day, with a median of seven days of power loss, according to a survey from the Consumer Reports National Research Center. “People see that one house on their street that had power throughout the storm, and they want a generator,” says Dan Giampetroni, a business manager at Kohler.
That said, still only about 3% of households have standby generators and only about 12% have portable ones, according to estimates from Generac, which tracks industry sales, including those of its competitors. Though that’s up from 2% and 10%, respectively, as of three years ago, it’s still a small percentage of households. One of the deterrents to more market adoption, especially for standby generators, may be price: John Hoch, the president of Power Equipment Direct, which sells home generators, says that a home standby generator will cost between about $2,000 and $5,000 or more (depending on power and size), not including installation. Portable generators are more reasonably priced, starting at about $300, but they tend to be substantially less powerful and don’t turn on automatically when the power goes out. Furthermore, the dangers of generators can deter buyers: Generators were linked to about nine deaths—mostly from carbon monoxide poisoning—during Hurricane Sandy alone. Read More
