In last month’s issue of PowerTALK™ News, I wrote about how the pandemic was impacting some of the giants of the power generation industry, and Generac stood out as an OEM that had been well-positioned to capitalize on the disruptions in the marketplace.
They were already dominant in home backup power, a household name, and a clear early thought for the many people who were suddenly working and learning from home and searching for a way to make sure they did not lose power. At the same as this enormous upheaval affected our lives, wildfires blazed across California and continue to ravage the state, and hurricanes devastated the Gulf Coast.
While other residential power suppliers ran into supply chain bottlenecks that kept their dealers from being adequately stocked for the surge in demand, Generac managed to keep inventory flowing, leading to profits that are incredible by the standard of what we expect in this time, and a 20.8% jump in their share price in August alone.
While that is certainly impressive, these circumstances largely suited the brand and product that Generac had already developed for itself. The success over the summer spoke to Generac’s logistical prowess more than anything.
But they have made sure to let us know that they are not content to rest on that. At the same time, they were announcing their 17% Year-Over-Year growth in earnings per share at the end of July, we also heard about a new home standby system with 70% the footprint of their existing systems. On August 10, Generac announced it was introducing a whole-home solar backup power storage system, something Generac’s CEO, Aaron Jagdfeld, says will be the first end-to-end managed battery-powered backup system.
For at least the last few years of our PowerTracker Business survey, which interviews 900 businesses every quarter about their thoughts on backup power and concerns about electricity prices and availability, Generac has been the only brand mentioned more than even three times as what the respondent would purchase if they were in the market for a generator.
Unlike companies like Tesla, which achieve market dominance out of a combination of being the first entry and holding a kind of mystique, Generac built its brand deliberately and nonsensically. That strategy has allowed them to become synonymous with home standby power for many of the consumers who are only now entering the market and achieve significant growth in what certainly is the most adverse economic environment in the last decade, if not nearly the last century.
But what Generac has in common with the Teslas of the world is that innovation drives them. There is no delay to let consumers buy up their existing inventory and then sell them a complimentary storage system. Even while demand is still surging and Generac is ahead of the rest of the market, they are unveiling their reduced footprint that they estimate will save consumers $8000 on purchase and installation, consumers that very well might have purchased the larger-footprint models if Generac had held back. And even while consumers appear willing and eager to buy up generators, Generac is offering them a new solar backup system with storage and load management. They are giving their competitors no chance to catch up. They are pressing on ahead with new products, new strategies, even ones that may eat into the business they already have. And that is why they will stay ahead. PSR
Tyler Wiegert is Project Manager and Analyst at Power Systems Research
