"If you have a 200-amp service, you must use a 200-amp transfer switch, even if the generator is only 5KW"
Larry, you would be right if you tried to use the ATS to serve the entire load of the house, but if you select about 8-12 circuits and the ATS transfers a 60 amp sub panel the ATS only needs to be rated at 60 amps or higher. You have 60 amps going to the ATS from the utility side, gen current going to the ATS, and the ATS decides which of these serves the sub panel.
