The Mighty Transfer Switch
With a resounding THUNK and smell of ozone your household appliances are transferred from the wheezing electric grid to your intrepid Prius. Your transfer switch has achieved its destiny.
What is a transfer switch? Think of the old movies - the lab, the arcs everywhere, the monster about to receive the life force. Somewhere on the wall there's a big switch. You grab one end pull it up and around, and ---ZAP---the circuit is complete. That's pretty much a transfer switch. It handles high current and high voltage by virtue of having a big conductor and a long travel from one connection to another. More modern ones aren't quite that dramatic, but you can see the principle. In effect, your house is connected to the pivot on the switch, and the knife blades either connect to the electric grid when it's working, or to the Prius/inverter combination when it isn't.
BUT - you may not want to transfer an entire house worth of circuits. So, in addition to the transfer switch, you will want to consider which electrical devices - "loads" - you'll want to keep operating during the emergency. Refrigerator: YES! Pool pump: NO! Reading lamp: YES! Television? No-there should be some sense of adventure, right? Anyway, this is a decision you have to make. Most major appliances have their own circuits and breakers, making it easy to connect or not connect. Most smaller devices don't - you just plug them in. For this reason, you will probably want all your outlets provided with power during emergencies and manually disconnect or avoid using devices that require a lot of power, such as space heaters and blow dryers. Courtesy of Onan, a generator manufacturer, here is a guideline on electricity usage of common household items.
Connecting the transfer switch is normally a job for a licensed electrician. If your jurisdiction allows you to do the work yourself and you know what you're doing, you hardly need my advice on this subject! If not, pay the extra bucks for the peace of mind, or at least the name of someone to blame. Transfer switches are commercial products, and have features that automatically sense which source of power to select. When I've picked one out, I'll document it here. If you're ahead of me, ask your electrician or check with the major generator manufacturers - they have them as accessories for their generators.
Is a Transfer Switch Necessary? Maybe not, if you use this solution. UPDATE 14 June 2005
Updated 19 June 2005