Energy storage is charged on demand

What is a demand charge?

Unlike residential consumers, who are charged primarily for their kWh (energy) consumption, larger electricity consumers must also pay demand charges on a kW (power) basis. To calculate the demand charge of a facility, the utility notates the highest average 15 minute period during a billing cycle.

What if demand charges are high?

If the demand charges are high enough, the next step is to pull usage interval data from the customer's meter (s). Your Account Manager will help you assess demand charge mitigation and aid you in the sizing of the solar system, battery bank and battery inverters.

How is a demand charge calculated?

To calculate the demand charge of a facility, the utility notates the highest average 15 minute period during a billing cycle. This is a surcharge on top of standard kWh rates and often times is a substantial portion of the total bill. To illustrate how a demand charge works consider the following examples:

Why does a utility charge a large electricity consumer?

Utilities must also charge large electricity consumers for demand (power). This charge represents the physical generation capacity required to be kept online to meet peak events. There is significant value in knowing that if all of the factories in a service area turn on their equipment at once, the utility will be able to support their activities.

Why do utilities charge for energy?

It is obvious why utilities charge for energy; it is a service provided over time that consumes fuel and other resources. Utilities must also charge large electricity consumers for demand (power). This charge represents the physical generation capacity required to be kept online to meet peak events.

How does a solar energy storage system work?

The blue line is the one to pay attention to here. When the energy storage system senses a peak demand event it discharges the stored energy at a rate capable of curbing the facilities demand. With a properly sized solar plus storage system the building’s net load is decreased from a peak of about 850 kW to approximately 700 kW.