When you install a generator or other type of backup power system, you should add a new electrical sub-panel containing circuit breakers for each of the loads which are to operate from the backup power source. If you have an Automatic Transfer Switch for your generator, it will feed this sub-panel, supplying either utility power or generator power to the breakers. If you have a Manual Transfer Switch, it will contain switches and circuit protection, and will serve as the sub-panel for wiring purposes.
In this typical home application of an ECS 4200-20 unit, we connect a Well Pump, a Refrigerator, a Furnace, and a Freezer (all 120v loads, on breakers #7, #8, #9, & #10) into the four Priority 1 inputs, and a 240v volt Water Heater (on breakers #4 & #5) into Priority 2. The Priority 1 loads are monitored, and the Priority 2 loads are controlled. The water heater will be disabled when any of the loads connected to P1 draws current, and will be permitted to operate when all of the P1 loads are off, which will occur periodically throughout the day and night.
Notice that while originally the electrical wire went from a given circuit breaker to the associated appliance (say a Refrigerator), now that same wire runs through the PRIORITIZER on its way to the load, so that the PRIORITIZER may either monitor the current being used by that appliance (P1 circuits) to see if it is running, or temporarily disconnect that wire (P2 circuits) when required.
You can also install the optional Utility Override unit at this time, so that the PRIORITIZER sequences the outputs when operating on standby power, but enables all of the outputs when operating from utility power.