The idea of an "uninterruptible" power supply is fairly simple:
Find a way to replace utility power when it goes away, fast enough
that the event doesn't disturb the equipment being powered.

There are several ways of doing this, all complex, expensive and
various degrees of inefficient. The most perfect, and least efficient,
scheme is to store energy locally and then convert it to AC which
powers the equipment being protected. In a home-scale system one
can use mains power to charge a battery, then run an inverter from
that same battery to power the protected equipment. The beauty of 
this scheme is that no logic, sensing or switching is needed. There
is no transfer delay, no reconnect trasient either, because there
is no action in response to an outage. It just works.

The penalties are several: The battery charger has to be powerful
enough to both charge the battery and power the load simultaneously.
The inverter and battery charger run at (near) full power all the
time. The combined efficiency will be around 80% at best. For a 
24/7/365 duty cycle, that adds cost surprisingly fast.

An improvement in efficiency comes from using a transfer switch
to connect the protected load directly to the mains when they're
working, with the battery charger just topping up the battery.
When the mains go down, the tranfer swich moves the protected
load to the inverter, which is permanently connected to the 
battery. The cascade AC-DC-AC losses are entirely absent in
normal operation, with only small parasitic losses from the
battery charger and inverter present during normal operation.
This scheme subjects the protected load to a brief "flicker"
on the line when the transfer switch changes state, but in
most cases that takes less than one line cycle (17 ms) and
well-designed equipment won't be disturbed.

The hard part of this scheme is deciding when to activate
the transfer switch. Usually the controls trigger on brief, 
small imperfections of the mains and go back to "normal"
(non-intervention) only after a prolonged (tens of seconds)
period of normal mains. The transfer swich moves the protected
load back to the mains and the charger tops up the battery.

When the battery approaches depletion we can introduce a local
generator to replace missing mains power. In the first scenario
the battery charger must both charge the battery and run the load.
With a transfer switch the load is placed directly on the generator
and the charger need only charge the battery, resulting in quicker
charging and higher efficiency overall. But, the transfer switch
logic needs to accept the relatively imperfect geneator output as
"good", which requires some adjustment of the transfer sensitivity
conditions or a relatively sophisticated controller.

The most common home use of a UPS is on a computer. The goal is 
not to permit operation during an outage, but only to give time
to perform a graceful shutdown. The batteries are small, internal
and sometimes not easily replaceable. 

The kind of UPS usage discussed here is best accomplished with 
the sort of unit sold for use on boats and recreational vehicles 
which alternate between locally generated power and AC mains power 
when it's available. The batteries are external and potentially 
several kWh in capacity. A secondary battery charger (solar,
usually) can augment the line/generator powered charger to reduce
fuel and hookup costs.  

It's worth remembering that any backup system must be tested in
a systematic way to ensure it'll actually work when needed. In a
setup without UPS equipment, every outage will black out the protected
equipment every time, since it takes most of a minute to bring an
engine up to speed, confirm oil pressure and pick up the load. Even
if the generator and transfer switch work perfectly, the protected
equipment will blackout, stop and restart in a real outage. 

With a UPS feature, regular testing is realistic, complete and
unobtrusive. Without UPS it's possible to start the generator
and transfer the (running) load from mains to generator and back,
but that still subjects the protected equipment to a minute-ish
outage when the event is not a test. 

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