Interactive Distributed Generators Join the Energy Transition

The rapid growth across distributed energy resources (DER) has spiked a demand for increasingly user-interactive, flexible, and smart assets. A decade ago, the distributed energy sector witnessed a rise of prosumers—electricity consumers who also produce it for themselves. These market participants are now evolving into gentailers—electricity generators who are also active retailers and export excess electricity to the grids. Operator-interactive gensets have existed in the energy industry for a long time. However, the recent push for flexibility, asset optimization, and energy efficiency has generated renewed interest in analytics and connectivity platform solutions.

Generac Expands Offerings through Neurio Acquisition

An example of the shift toward gentailing is exhibited by a recent acquisition. On March 13, Generac Holdings Inc., a leader in the standby and prime power generator market in the US and Canada, acquired Neurio Technology Inc., a Canadian energy data company that uses metering technology and data analytics to optimize energy use across distributed energy users. Generac historically has offered single engine backup and prime power systems up to 2 MW for residences and small businesses as well as paralleled solutions up to 100 MW. It uses a variety of fuel sources to support power needs for C&I customers.

Neurio, founded in 2005, sells hardware and software systems that enable users to manage and control electrical loads, solar power systems, and battery storage. It’s not surprising that Generac has identified a value proposition for increased interactivity in the behind-the-meter application markets. The company plans to strengthen its home energy management capabilities and accelerate efforts around connectivity and remote monitoring for better customer engagement. This will be a key contribution to drive its customer-focused strategy.

Customer Awareness Increases Technology Adoption

This acquisition reiterates the trend thatcustomers will be more likely to adopt technology solutions to improve asset management and reduce total cost of operations as they become more aware of how energy can be used and managed in homes and offices. Data analytics is likely to play a crucial role in unlocking an asset’s life cycle optimization through innovative real-time operational data. Distributed generator vendors such as Generac and Cummins are increasingly investing in remote monitoring systems. The systems provide owners with enhanced connectivity to their generators and send automatic notifications via text or email when the operating status of a generator changes. Both original equipment manufacturers and power market aggregators are embracing these value streams, both to provide added value to customers and to compete against the falling prices of alternative energy resources like solar and storage.

Guidehouse Insights’ 2018 report, Smart Gensets, examines how that market is expected to surpass $18.5 billion in annual revenue by 2026 at a compound annual growth rate of 10.5%. The report also explores the shift in the global power equation. The world is moving toward generation that is more distributed, intelligent, and interconnected, and smart features are being incorporated into gensets at a growing pace.