Home Generator Payback at Resale

As every last home impacted by this latest power outage gets their power fully restored, I’m sure more than a few folks have, at least for a short moment, thought about home generators.

When we completed an extensive rehab of our Lake Forest home I, like most people, did not even evaluate adding a standby home generator. Our power was interrupted during both of these last storms. Each time, we were very fortunate to get power restored just before the 48-hour mark.

So this week I found myself motivated enough to do some research on standby home generators. I studied some top brands such as Kohler, Generac,  Briggs & Stratton, and GenX (Highland Park Electric) to learn what I might need, what they offer, and what the fully installed cost would be.

It looks like to back up an entire electric panel for a typical 200 amp residence, an integrated 20kw system running on natural gas could cost us from $9,000 to $13,000 fully installed (depending on system choice and installation specifics). Of course a larger system would be needed for a larger home and there are many partial and portable options costing (and delivering) much less.

It sure would be nice to not worry about or be impacted by power outages once you have that full automatic standby system. But on the topic of resale value added, how do standby home generators stack up?

Every home improvement payback study that I’ve ever seen places standby home generators down at the very bottom of the cost vs. value-added list. The payback at resale is usually stated as only between 40-50 percent of the investment. Ouch.

You could point to a couple aspects where, relative to national statistics might improve the payback statistics for our particular local area. We do have so many trees impacting above-ground electric delivery that can produce outages, and home values here are high relative to the costs of adding generators.

At the highest price points in our market, perhaps the “assurance value” (or even the “prestige value”) of being equipped with perfect home mechanicals and backup systems is actually higher than the installation costs. Does everyone know someone who relates to this?

But let’s get back to some practical realities, especially from the home buyer’s perspective.

• First, we’re in a buyers-market and likely will be for a while, so any and all improvements can be downplayed and minimized in the buyer’s eyes, which unfortunately is what counts today.

• Second, buyers everywhere typically don’t feel or appreciate the value of a standby home generator like the sellers surely did when installing the system, especially when no one remembers these power outages.

• Third, the presence of any backup system, especially when its value is being actively promoted on the listing, results in having to show buyers that problems are experienced frequently enough to justify the backup system (and hence why they should reimburse you for it). This is not a desirable topic to focus on when trying to emphasize the positives to wow the buyer.              

So in the end, I guess you just have to justify half the cost on your own “enjoyment”…