But I think it really comes down to the homeowner requesting that, right. And I think what installers appreciate mostly is the ease of installation and the level of technical support that they get from ecobee. The level of support from ecobee, whether you are a homeowner or whether you are a contractor installing the product is phenomenal. And that’s what wins the day with an installer. It can win the day with a homeowner as well, but I think for installation, from an installer standpoint, time is money. So, if you’re dealing with a product that doesn’t have great support and you have challenges with that, and you are not able to get answers to the questions you need in a timely fashion, you are wasting time, you are wasting money. If you have an ecobee thermostat and you have a problem or you have a technical question, you can get a response very quickly and a high-quality response at that and so they get incredibly high marks for technical support.
I think that’s why installers largely are choosing the product over other options in the marketplace.
Operator: [Operator Instructions] And we have a question from Jeff Hammond with KeyBanc Capital Markets. Your line is now open.
Aaron Jagdfeld: We will follow-up with you, Jeff.
Kris Rosemann: Sorry about that.
Operator: Moving on to the next question, your next question comes from the line of Stephen Gengaro with Stifel. Your line is now open.
Stephen Gengaro: Alright. Thanks. Good morning.
Aaron Jagdfeld: Good morning.
Stephen Gengaro: I tell you my generator has been a lot more reliable than some of these questions so far. So, I was just curious, you talked about underselling demand still so far as you work through the inventory channels. As we think about the dynamics, I know it’s early to tell, but as we think about dynamics into next year, do you think you get back to kind of a more normalized annual growth rate in ‘24?
Kris Rosemann: Yes. I mean obviously, you won’t have the headwinds that we have had with bringing field inventory down. We have been under-shipping that. It will be more normalized. And so just – I mean just in terms of raw shipments, we should see growth that way in that home standby business. Your question maybe is more like will activations grow, installations grow, which is our proxy for I guess sales in terms of the end market that way. We obviously are – we are evaluating market conditions, IHCs. Again, second best on record, so that obviously is a leading indicator, so we got…
Aaron Jagdfeld: But let’s be clear, I mean over the category’s history, over the last 20 years, it’s grown 15% on a compounded basis. So, it just hasn’t been in a straight line. And this time around, it definitely wasn’t in a straight line because of the field inventory challenge that we have had as a persistent headwind this year. It’s getting better, but it’s really lasted the full year. So, I mean I am confident longer term, the category is going to continue to grow. It is still by far the most cost-effective way to deal with the power outage. And outages are – you look at the long-term baseline average. And these are numbers that are readily available from third-party collectors government data, FERC and NERC and others who focus on reliability, the statistics don’t lie.
I mean power outages are on the rise, and they are lasting longer. We hear it from customers who are frustrated. There is another outage in Michigan today. Michigan has just been hammered by outages, and that’s one of the reasons why it’s a really good market for us penetration-wise. I mean pen rates in Michigan are over 15%, which is 15% of all single-family homes over $150,000 in value have a home standby generator install, which is when you think about that for a second, you put that in context, and I think it tells you where the pen rate can go, right. I mean pen rate nationally is 5.75%. And we are at states like Michigan, which is a major state, it’s at 15%. So – and every 1% of pen rate is the $3 billion market opportunity. So, you start adding that up and the numbers get really big, really fast.
And we are at 75% share there, maybe even a little better than that. And that’s something that I think from a focal area is obviously something we put a lot of effort against as we look forward. But in terms of just whether that’s going to happen next year or not in terms of normalized growth rate, there is a lot of factors that go into that. But longer term, it’s definitely a category that is going to continue to grow.
Kris Rosemann: Yes. We typically short-term guide without any major events. And as you know, those happen. So, that’s always a catalyst for growth over the longer term. So, that – those are obviously the drivers. And then all the megatrends around that we are talked about for a while that are driving the demand for the category higher, those are still intact.
Operator: [Operator Instructions] And the next question comes from the line of Jordan Levy with Truist Securities. Your line is now open.
Unidentified Analyst: Hi all. Henry on for Jordan here. I was just wondering if you could dig a bit deeper into some of the different dynamics you are seeing between the U.S. and the international C&I segments in the business. And now some of the segments you are looking for 2024. Thanks.
Aaron Jagdfeld: Yes. So, it’s great question. Thanks. In the U.S., we have outsized market verticals, I would say, in telecom and the national rental channels as well, which I will roll up in that C&I. So, in the U.S., as we have said, national accounts, the national rental accounts have, last couple of quarters have cooled off. They were heavy buyers of equipment last year and even earlier this year, that’s cooled off as I think there is some broader slowdowns in just some of the C&I markets overall. I think owing to some of the higher interest rate environment that we are in today, new construction. If you look at the Architectural Billings Index, last month being or like a couple of weeks ago being quite a bit softer.
I think you are starting to see that and feel that. Certainly, we are in the rental markets, as we said. And then the other large vertical for us is telecom which has also slowed down considerably here. The CapEx spend for the large telcos, I think has been reined in a bit just as they wait to see what the end markets look like for the wireless consumer. And I think you are going to see that on a long-term basis, both of those verticals are going to be growing long-term. They just in the short-term here pulled back. So, that’s a dynamic that differs from, I would say, the rest of the world. We do sell into telecom and we sell equipment rental companies as well. But in terms of just their outsized nature of the size of those verticals here in the U.S., they are bigger.
Outside of – when you get outside the U.S., I would say one of the areas that – for C&I that we have seen great interest for our backup power has been in Europe with, I think some of the war with Russia, Ukraine and just the concerns around energy security in the C&I space that impacts businesses. It may have had concerned about power interruptions last winter. That’s abated a bit, I think in recent quarters, but we are heading into winter and that’s something that could pick back up, but we are watching that. But I would say that’s a unique consideration when you get outside the U.S. And then there are some markets that are – when we called them out this morning in the call in our prepared remarks, but there is a couple of markets that are growing in their importance.
