Electricians and contractors installing standby power systems will certainly grow their businesses as we embark on the energy transition. However, this requires them to be aware of new and ever-evolving requirements in the National Electric Code (NEC) involving these power systems, including sources such as generators, renewables, and battery energy storage.

Section 702.4 of the NEC and other supporting sections, such as NEC 750.30 provide a framework for optional standby power systems and the control systems that manage them.
Homeowners are increasingly installing battery energy storage to save on energy bills and to stay powered in the event of outages. With this, this section of code is only becoming more relevant.
As a prime example, think of storms that disrupt power to entire communities for extended periods. Not surprisingly, homeowners want to protect themselves from these disruptions. So, they install equipment with a backup source and transfer the entire home’s power during an outage. Homeowners do not realize that the backup power source often cannot handle that large of a load. And, often, these backup sources fail.
Since optional standby systems are separate from the main electrical service, they need to be sized appropriately and include safety measures to ensure they meet the demands of the expected appliances and other loads. This is where Section 702.4 comes in, focusing on the system capacity and rating.
What is NEC Section 702.4?
NEC Section 702.4 addresses the system capacity and load connection options for optional standby power systems. The backup system capacity requirements are different for systems where the load is manually connected by the user, versus systems with an automatic means to power the load.
NEC Section 702.4 is divided into separate parts for these connection types.
- Manual Connection – 702.4 (A)(1)
When using a manual connection, users need to be present to operate the system and choose which loads will connect to the backup source. The system should be rated and have the capacity to handle the equipment it is powering. - Automatic Connection – 702.4 (A)(2)
For automatic systems, which provide power to loads without user operation, two options are available based on a determination of the load that will be connected in compliance with the NEC Article 220. - Full Load – 702.4 (A)(2)(a): The backup source must be able to supply the entire load connected to it automatically.
- Energy Management System (EMS) – 702.4 (A)(2)(b): If an EMS is used to manage load connections, the backup source needs enough capacity for the maximum load the EMS will permit.
- Energy Management Systems (EMS)
An EMS monitors, controls, and optimizes energy usage. An EMS that includes the capability to control sources and loads to prevent system overload is referred to as a Power Control System (PCS). Examples of these are Schneider Pulse and the QO smart panel solution. Such systems support homeowners in optimizing their energy consumption and maximizing efficiency.
Why is Section 702.4 important?
NEC Section 702.4 was introduced in response to the increasing use of optional standby systems. Its use is essential in keeping the home’s backup power sources running safely and efficiently. Additionally, NEC Section 702.4 helps ensure the reliability of optional standby systems.
- Safety – The lack of guidelines to advise on the installation, operation, and sizing of optional standby systems poses a potential safety risk. Adherence to this code section reduces the risk of overload or system failure and associated impact to persons and property.
- Efficiency – Load shedding protocols (as outlined in NEC Section 750.30) allow non-critical loads to be shed for optimization and efficiency, so the standby power is used as efficiently as possible. This is important to ensure that the backup supply can last longer, only serving necessary loads.
- Reliability – Without NEC Section 702.4, optional standby systems may not be sized appropriately, which means they could fail to handle the loads required for the home. This increases the risk of system failure at potentially critical times when backup power is needed in emergencies.

What does this mean for electricians?
More people are relying on storage systems than ever before. According to Wood Mackenzie, the number of solar-plus-storage installations was expected to double from 2023 to 2024, hitting 181,000, and the number of annual installations will continue to grow until 2028. Therefore, NEC Section 702.4, is more relevant than ever for electricians.
Additionally, backup storage systems are expensive to set up, given that they require specialized equipment. Therefore, they are usually not sized to handle a home’s full electrical load due to the substantial investment required. So, NEC Section 702.4 and its related sections help ensure battery power is being used optimally, to make the most of available backup power, ensuring safety and providing reliability for homeowners.
The information laid out in NEC Section 702.4 impacts the working practices, design choices, installation processes, and the standards expected of the work being carried out.
What else do electricians need to know about NEC Section 702.4?
Certified Use
Electricians will need to ensure that EMS/PCS used in the home are correctly certified for use.
Sizing
According to the code, the sizing of the standby system should suit the load it is expected to serve. Electricians will need to ensure they are sizing this correctly by performing load calculations. For systems that include PCS, the PCS may be used to set the maximum load.
Load Shedding
Electricians should also understand the concept of load shedding, as set out in NEC Section 750.30. They need to be able to identify the loads requiring backup power and set up the electrical system according to these criteria. This way, homeowners can rest assured that their critical loads remain functional when relying on backup power.
A PCS, such as Schneider Pulse, can be commissioned to automatically prioritize desired loads and shed other loads to protect from system overloading.
How code knowledge can benefit electricians
NEC Section 702.4 is an essential part of ensuring that optional standby systems can be used successfully, which means safely, efficiently, and reliably.
Electricians must understand national codes and their state interpretations to navigate changes in energy consumption. This ensures work is carried out safely and reliably. Also, those who are fluent in such codes will gain the trust of customers seeking guidance as their energy use changes.
Additionally, electricians must understand how PCSs are used and installed to ensure that they operate in accordance with the NEC, especially as the modern homeowner is likely to use such systems to manage their home’s backup in the most efficient way.
To learn more about Schneider Electric’s home energy management systems and more about simplifying home electrification, visit our connected home page.
The information in this blog is for educational purposes only and does not replace professional advice. Proper training and relevant certification are essential before undertaking any electrical work.
Working with electricity can be hazardous without a thorough understanding of the National Electrical Code (NEC). Always follow the latest NEC regulations applicable in your state, when working with electricity. For more information on the NEC, please visit the National Fire Protection Association (NFPA) website.
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