How a demand charge works
Most commercial rate schedules measure your average power draw in each short interval — often 15 minutes — and bill the month’s highest one at a rate per kilowatt. A compressor, an oven bank and HVAC all starting together can set a peak that costs you all month.
Pull twelve months of bills and interval data from your utility. If demand dollars are a big fraction of the total, you’re a candidate for peak-shaving.
Why solar alone often disappoints here
Solar output drops when a cloud passes. If your peak happens during that dip, or after sunset, the demand meter records it anyway. So a system that cuts your kilowatt-hours substantially can leave the demand charge nearly unchanged.
Solar still makes sense for the energy side of the bill. We just don’t sell it as a demand fix.
Storage aimed at the peak
A commercial battery watches the building’s load and discharges when it approaches a set threshold, clipping the spike. Sized correctly, it lowers the demand recorded without needing to cover the whole day. Pairing it with solar lets the panels recharge it.
Storage also keeps federal §48E eligibility through construction starting in 2033, longer than solar, and is eligible for depreciation. Ask your CPA how both apply to your business.
Cheap fixes first
Staggering equipment start times, soft-starting large motors and adjusting HVAC schedules can drop peaks without any capital. We look at your load profile and tell you what’s free before we quote storage.
FAQ
Questions we hear
Will solar panels reduce my demand charges?
Sometimes a little, often less than expected. Demand is set by your single highest interval, which can occur on a cloudy afternoon or after dark. Storage is the dependable demand-charge tool.
How big a battery do I need to shave demand?
It depends on how tall and how long your peaks are. Short, sharp spikes need power more than energy capacity; long plateaus need both. We size from 15-minute interval data.
What data do you need to evaluate demand savings?
Twelve months of bills and, ideally, interval data from your utility account. Our commercial ROI calculator gives a first estimate from monthly kWh and peak kW.
Do co-op commercial rates have demand charges too?
Many do, and some rural co-ops apply demand-based rates to irrigation and larger services. Rate designs vary widely, so we read your tariff before modeling.