What is a Demand Charge?
There are two parts to an electric bill: energy charges & demand (power) charges.
Energy charges are based on the total energy used, and are fairly easy to understand. A demand charge on the other hand, has the following attributes:
- A monthly charge based on the highest amount of energy used in a 15 minute interval
- Typically represents 30 – 70% of your electric bill
- Customers are charged different rates in Summer (higher) than Winter (slower)
- Leveraged Against
- Large businesses
- Time-of-use customers
- As a penalty for customers who exceed the “average usage".
We use the auto analogy above to demonstrate the concept, but also to underscore the significance of a power bill's costliest monthly component being based on an event occurring in a small interval of time that is not representative of the average, much the same as a speeding ticket.
We can't help you with a speeding ticket, but we do have solutions designed specifically to target and reduce your Demand Charge. Based on an analysis of your energy usage over the last 6 to 12 months using our proprietary Cloud-based algorithm, we can pinpoint your peak power usage, and optimize an energy storage solution that senses when demand is crossing a preset threshold, and discharges energy when you need it most. If this sounds good to you, or if you'd like more information, contact us. We can help.