YPSILANTI, Michigan — Electricians are booked and busy with customers waiting months to get standby electric generators installed on their properties as manufacturers face parts shortages and installation companies are in need of journeymen.
Customers are willing to shell out thousands of dollars for the equipment that offers power from natural gas, propane or diesel when the electrical grid doesn’t. Remote work, virtual learning and summer storms that knocked out power for days have caused a surge in demand in southeast Michigan and across the country. There’s no sign of slowing down as infrastructure ages and people are increasingly relying on an electric supply to power things like electric vehicles.
“There were four major outages this summer where the phone just didn’t stop ringing,” said Mark Troutt, general manager at Kelley Brothers LC in Livonia, Mich., which is booked into March for Generac generator installations. “We could double our business if we could get more generators. We’re selling at least 70% over last year, which was over 70% from the year before. The only choke point is equipment and people to put them in.”
Keith Clark, 54, and his wife had discussed getting a generator three years ago when they moved to their home in Farmington Hills, Mich. This summer made them fed up after losing power five times in six months, with the longest lasting a day and a half. When an outage led them to replace the condenser on their new refrigerator, they ordered a Generac generator in October, which won’t be installed until January.
“I’m just tired of not having power and having to throw out your food,” Clark said. “It’s an insurance just in case it happens again.”
Clark is paying $12,000 for his generator, plus an extra $1,000 for a new meter from Jackson-based utility Consumers Energy. Some might cost a few thousand less, but it’s becoming increasingly common to pay about that much or more to power a whole house, according to generator dealers, with about half the cost for the equipment and the other half for labor to install it.
An installation job requires an electrician journeyman, at least one other person and typically takes about a work day to complete. With high demand for good electricians, a shortage of skilled tradesmen also is contributing to wait times for generator installations.
“We put a help wanted ad out, and you might get one or two guys to come in,” said David Frey, master electrician at Livonia-based Foundation Systems of Michigan, who has hired from as far as Alabama and Washington to install mostly Cummins generators. “They might fit your profile. Some of them don’t. Every good electrician out there is working.”
‘A necessity’
About 5% of U.S. households have a generator. Generac Holdings Inc. represents about 80% of the standby generators sold in the country. Residential product sales grew 33% year-over-year to $609 million in the third quarter alone, and the Wisconsin-based manufacturer is on pace to grow its revenue by more than a $1 billion this year, according to the company.
For the increase in demand, it credits an aging electric grid that has made outages more frequent and long-lasting; more people working, learning and shopping from home; and extreme weather conditions such as February’s ice storm in Texas and wildfires in California have caused more outages. The company has increased its workforce at its two Wisconsin plants and is opening a third in South Carolina.
“The convergence of the heightened power outage activity, broader electrification trends and people spending more time at home has driven unprecedented demand for home standby generators,” Generac CEO Aaron Jagdfeld said during an earnings call earlier this month.
Competitor Kohler Co. also recently expanded capacity at its plants in Wisconsin and Mississippi, said Melanie Tydrich, senior channel manager for residential products at Kohler Generators.
The demand isn’t expected to lessen: Analysts at research firm Technavio project the market will grow globally at a more than 3% compound annual growth rate through 2024. That’ll grow the market by $4.09 billion by 2025.
“It used to be that air-conditioning was a luxury, but now it’s a necessity,” Frey said. “Generators were a luxury, now they’re becoming a necessity for medical equipment, water if you have a well, working form home, heat, air conditioning and car chargers.”
Foundation Systems of Michigan does about three installations a day six days a week out of its Livonia office. Its Grand Rapids and Traverse City locations typically do an additional two or three each day.
The company has some generators on hand and is getting 50 more in a couple of weeks. A delivery of 180 generators is coming in February. An order made six months ago of 150 will come sometime after that. Frey’s also gotten creative in trying to find a generator or two here and there for backup, though that typically comes at a premium price.
Customers can get a generator that will run just the essential appliances, though more popular are generators that will power the whole house. Generators 15 years old are starting to be replaced, though newer ones might last closer to 20 years.
“When we change out old ones, they always get a whole-house generator,” Kelley Brothers’ Troutt said. “They never wish they had less.”
Getting a generator typically involves having an installer look at the property to decide where to put it. Whether it has to go in the backyard or can go in a side yard a certain distance from a neighboring house depends on the municipality. A home’s electric system must be up to code and a permit must be pulled. Gas lines might have to be shifted, and an inspection might need to be performed.
Generators also could help to reduce home insurance rates because they reduce the risks of appliances breaking or frozen pipes bursting, especially for snowbirds. Most if not all of their costs might be recouped, too, in home value, said Wael Hussein, a Keller Williams Legacy real estate agent in Dearborn, Mich.
“It’s not as much as updating a kitchen or a bathroom or something more attached to the property, but with the recent outages and the inclement weather, generators have been more and more popular in the past couple of years,” Hussein said.
‘Self-sufficient’
Martha Cline, 79, got her 17 kilowatt-hour Cummins generator installed, enough for her electric stove and other large appliances. A couple of months ago she had called a number of contractors about getting a generator after her Ypsilanti home lost power twice — once for five days. Foundation Systems of Michigan could get her in the soonest.
“We didn’t want to lose a lot of food,” Cline said. “It’s a part of the process of being self-sufficient. You don’t want to have to go somewhere or ask a neighbor to charge your phone or use something you need or keep warm in the winter.”
GenPro LLC Professional Generator Services in Howell sells a variety of generators, mostly from Generac and Kohler. It installs about 10 per month, though last week owner Shawn DeZelia didn’t have any in stock, but a delivery of seven was coming. He’s booked until almost October of 2022.
“We don’t have a month of supply,” DeZelia said. “They’ll have equipment 90% completed, but be waiting on two or three components waiting on ships from China, Vietnam, wherever it’s being made.”
Reliability is the largest concern for customers coming to GenPro, DeZelia said: “There’s a lot of political reasons. There is zero trust in the big companies that run the grid like DTE and Consumers. There’s no faith in the system.”
DTE Energy Co., which provides electricity to most of Metro Detroit and the Thumb region, says 90% of outages result from fallen tree branches. The Detroit utility earlier this month announced a five-year, $7 billion investment plan into grid infrastructure and reliability, including tripling tree trimming spending.
“Generators are purchased as a backup to a grid that is not functioning the way it should,” DTE CEO Jerry Norcia said during a recent Detroit Economic Club meeting. “My goal is to make sure you never need a generator, so I’m never going to encourage you to buy a generator unless you have to, because we do want to build a grid for the future where generators aren’t required.”
He also noted some generators can be noisy. DTE is taking steps to reduce carbon emissions as well, with a goal of ending the use of coal by 2040 or potentially sooner. Generators release carbon emissions. A renewable energy alternative is installing solar panels with energy storage, which companies like Generac, Cummins and Kohler offer.
CMS Energy Corp.’s Consumers Energy is planning to end its use of coal by 2025 and achieve carbon neutrality by 2040. It’s looking to reduce the average length of time that customers lack power by nearly 15% from 2020 to 2025, and is targeting $100 million annually in tree trimming. The utility also urges its customers never to operate generators inside homes, basements or garages and away from enclosed areas to avoid potential carbon monoxide poisoning.
“Consumers Energy supports customers’ use of generators as a backup power source,” spokesman Brian Wheeler said in a statement. “Our focus is to restore power to customers as quickly as possible, and also to encourage people to use generators safely.”