Generators, transfer switches, interlocks and backup power: Article 702 and how to sell backup honestly
In one paragraph
Backup power in a California house is one of four things: a portable generator on a cord with a listed inlet and interlock, a standby generator with an automatic transfer switch, a battery system with its own transfer equipment, or a whole-house arrangement that combines them. Article 702 governs all of it as an optional standby system, and its rules are short and unforgiving: the standby source must never be able to connect to the utility at the same time (702.5), the system must carry the loads the customer will actually put on it (702.4), a sign at the service must say what kind of standby source there is and where (702.7), and the generator's own disconnect, receptacle GFCI and grounding rules in Article 445 and 250.30 apply. The suicide cord and the unlisted breaker interlock are the two things you will be asked to install and must not. New California homes come battery-ready, which changes the estimate.
The rule
An optional standby system must have transfer equipment that prevents the inadvertent interconnection of the normal and alternate sources (2025 CEC 702.5); a manually transferred system must be sized for the loads the user will connect or the user must be able to select them, and an automatic system must carry the full load or use load management (702.4); a sign at the service entrance must indicate the type and location of each on-site standby source (702.7); generator receptacles and disconnecting means follow Article 445, including GFCI protection on portable generator receptacles (445.20); and where the transfer equipment switches the neutral the generator is a separately derived system grounded under 250.30. Battery-ready new homes carry the 150.0(s) infrastructure the Energy Code specifies.
Why it matters
Every outage season brings the same two requests: a plug to feed the house from a portable generator, and 'whatever is cheapest.' The first is a lineman's death if it is done the way the internet shows, and the second is a customer who finds out during the outage that the freezer and the furnace were not on the circuits you picked. Article 702 is short enough to know cold, and the interlock-plus-inlet install is a good, permitted, profitable half-day job when it is done to the code.