Smart" is a way used by manufacturers to differentiate among product lines. In the APC case, both of them, the Back-UPS and the Smart lines ares Off-Line models (line interactive is a fancy way of saying "more expensive off-line"). Both of them offer voltage regulators and line filtering. The difference between them is the output waveform in back-up mode; Back-UPS use a PWM waveform while Smart units use a sinewave one (both of them are generated by PWM circuitry, but Smart line have different circuitry and more filter in it). Among this, Smart units, in the APC world, have better communication capabilities and more programing flexibility.
Now comes the problem. APC Back-UPS and Smart products should not be used with back-up generators because the frequency drift produced in them by load changes. Besides that, generator's distortion is, often, too big for those UPS to handle and this and the frequency problem just mentioned could couse the UPS to switch to back-up mode (running from batteries) too often and, of course, shout down the load sooner or later. You could try it, many people mix off-line units and back-up generators, but I don't.
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Joe
Electro-mechanic Engineering
jpm@ieee.org