Why demand charges resist solar
Most commercial rates bill energy (kWh) and demand (kW) separately. The demand portion is set by your highest average draw over a short window, commonly 15 minutes, in the billing period. Solar lowers energy charges reliably, but a passing cloud, a snowy week or a peak after sunset can all leave the demand charge unchanged.
Some businesses do see demand savings from solar — those whose peaks line up with midday sun, like certain cooling-heavy buildings in summer. We check that against real interval data rather than assuming it.
How peak-shaving storage works
A commercial battery watches the building’s draw and discharges when it climbs toward a set threshold, keeping the metered peak below it. The economics hinge on the shape of your peaks: short, sharp spikes (a compressor bank starting, an oven line firing up) are cheap to shave; long, flat plateaus need a lot more battery.
Storage keeps its federal §48E credit eligibility through construction starting in 2033, and 100% bonus depreciation is available again for qualifying property — both questions for your CPA, since how they apply depends on your tax situation.
What we need to model it
Twelve months of bills, and ideally 15-minute interval data from your utility. With that we can see exactly when your peaks happen, how often, and how much storage it takes to cut them. Without interval data, any savings estimate is a guess, and we’ll say so.
What to do next
- 1Pull 12 months of bills and request 15-minute interval data from your utility.
- 2Identify which equipment drives your peaks — sometimes a controls change is the cheapest fix.
- 3We model solar-only, storage-only and combined options with the commercial ROI calculator.
- 4Review tax treatment with your CPA before committing.
FAQ
Questions we hear
What is a demand charge?
A charge based on your highest rate of power draw, in kW, during a short window — often 15 minutes — in the billing period, rather than on total energy used.
Could we cut demand charges without any equipment?
Sometimes. Staggering equipment start-ups, pre-cooling, or shifting a process can lower peaks for nothing. We’ll point those out if we see them in your data.
How big a battery does a small business need for peak-shaving?
It depends entirely on the height and duration of your peaks. Interval data tells us; a square-footage rule of thumb doesn’t.
Can the same battery provide backup power?
Yes, with the right configuration, though reserving capacity for backup reduces what’s available for shaving. We design for the balance you choose.