Recent power outages brought on by extreme weather have presented a bright spot for the generator industry. After the Texas deep freeze exposed vulnerabilities to the state’s power grid, demand for heat-providing electricity and gas has bulked up sales for generators.
Companies that produce and sell back up generators like Generac have seen strong demand over the past 12 months. From hurricanes and floods in the Gulf Coast to wildfires on the West Coast and freezing temperatures in Texas, severe weather conditions continue to undermine electric service and critical infrastructure.
The mayhem has propelled more consumers to hedge risks against being left in the dark, and generator companies are racing to produce enough supply.
“They cannot literally make them fast enough,” FOX Business’s Jeff Flock told Varney & Co from a from the Generac floor plant in Whitewater, Wisconsin. “I’ve never seen this kind of activity before. You look at the numbers of revenue last year largely as a result of the pandemic, but kind of almost a perfect storm of power outages and crazy weather across the country as combined to really drive up revenue.”
The winter storm in Texas, an energy-independent state, tested the limits of power grids after millions lost power from the rolling shut-offs. Similar outages occurred amid fire risks in California last year. In addition to concern over the reliability of power grids, the pandemic has homebound Americans looking for ways to improve and better secure their homes.
As a result, Generac’s revenue ticked up from $2.20 billion in 2019 to $2.49 billion in 2020, up 12.7% year-over-year.
“First it was people, we couldn’t get enough people back in the spring,” Generac CEO Aaron Jagdfeld told FOX Business. “Now we can’t get enough parts. That’s everything from microprocessors to sheet metal and everything else we need.”
The company’s growth has already prompted the construction of another plant in South Carolina to bolster the production of home standby generators and other energy technologies. The 421,000square-foot facility is expected to create 450 new jobs within the first two years. Yet there is still a large need for more local permits and contractors to install generators on top of the 7,000 dealers that Generac has in its current network.
“This is the sign of the times,” Flock said. “People realize maybe it’s climate change, crazy weather, all that sort of thing, and then the pandemic on top of that, you want to be secure in your home.”
FOX BUSINESS’ JEFF FLOCK CONTRIBUTED TO THIS ARTICLE.
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