“Reliability as a Service” Model Gives Consumers New Options for Backup Power

Generators can represent a significant investment for a homeowner, who 
might be eyeing the purchase as another form of insurance policy. They 
might only really need backup power once every couple of years – or even
 less. For some, the upfront cost and ongoing maintenance expense can 
still seem a fair trade for the security gained in knowing a home or 
business can keep running when others’ lights are out. For many others, 
however, generators can simply be budget busters. Generac

Chuck Ross

Generators can represent a significant investment for a homeowner, who might be eyeing the purchase as another form of insurance policy. They might only really need backup power once every couple of years – or even less. For some, the upfront cost and ongoing maintenance expense can still seem a fair trade for the security gained in knowing a home or business can keep running when others’ lights are out. For many others, however, generators can simply be budget busters.

Recognizing the hurdle that first costs can pose to such consumers, some companies are beginning to market the power reliability generators provide more like an insurance policy than a capital investment. This new approach, in which customers pay a monthly fee (but nothing upfront) is similar to a number of other “as-a-service” marketing plans developed by companies ranging from software developers to lighting manufacturers. This “reliability-as-a-service” model also benefits from changing electric utility regulations in some states that allow the generator installer to make money from the equipment when customers don’t need backup power.

In a number of states, regulators are allowing third-party companies with portfolios of distributed energy resources (DERs) – like battery storage systems and onsite generators – to aggregate the output of those resources and sell that electricity into the power-supply market. These aggregators just need to be able to respond on very short notice – sometimes in as little as 15 minutes or less. In this way, utilities can meet their customers’ electricity needs without having to fire up more expensive natural gas or coal plants during peak-demand periods.

This kind of “virtual power plant” has been made possible by advanced control systems that allow centralized control of large numbers of customer-sited generators. It also allows such systems’ owners to keep costs low for homeowners seeking affordable backup power. In addition to covering all installation expenses, the operators also take care of regular generator maintenance requirements to ensure their equipment is ready to work – either to support the local grid’s power requirements or keep a homeowner’s refrigerator and furnace operating during a storm.


Photo courtesy of Generac