Demand charges are additional fees that utilities impose on commercial customers based on their highest level of power usage during a billing cycle—often referred to as the “peak demand.” Unlike regular energy charges, which are tied to total electricity consumption over time, demand charges reflect how much power a facility draws from the grid at any one moment. These spikes can occur when multiple systems—like HVAC units, lighting, and machinery—run simultaneously, even if only for a short period.
Because demand charges can make up a significant portion of a business’s utility bill, managing and reducing them is a key part of energy cost control. Solar energy systems help by offsetting daytime electricity use with power generated on-site, reducing the amount drawn from the grid during high-demand periods. When combined with battery storage, excess solar energy can be stored and strategically discharged during those peak times, further flattening demand spikes.
This approach not only lowers monthly demand charges but also makes energy costs more predictable and manageable over time—helping businesses improve their bottom line while advancing sustainability and energy independence goals.
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