4 Ways to Reduce Your Commercial Electricity Demand Charges

Commercial Electricity Demand Charges

If you look at your recent electricity bill, you’ll notice that aside from your usage charges (the amount of electricity you use multiplied by the rate you pay per kWh), there is something called a “demand charge”. For business owners, these commercial electricity demand charges can add up to a lot of excess cash being spent, so it’s important to look at ways that you can reduce this charge and keep your electricity bill as low as possible so that more funds can be directed towards money-making business activities.

Your energy provider calculates your commercial electricity demand charges by looking at your electricity demand in 15-minute intervals (also referred to as “demand intervals”) throughout each month. There may be thousands of these intervals captured, and all are reported back to your provider. The catch here is that the times when your business uses the most power are those that commercial electricity demand charges are based on. In this way, your provider takes the highest demand intervals and then charges you for the peak kilowatts (kW) for that interval, multiplied by your rate. Naturally, this becomes a hefty charge when added to the other costs on your monthly bill.

Ways to Reduce Your Commercial Electricity Demand Charges

1. Optimize Your Company’s Energy Use

The fastest way to minimize your commercial electricity demand charges isn’t always the easiest way, but it involves optimizing your business to lessen your peak demand. Purchasing new energy-efficient equipment can assist with this, as can using only the right sized equipment that is necessary for the task at hand. Otherwise, you can look at scheduling specific, high-consumption activities so that they only occur during times when the rest of your usage is low. This will help to lower the kilowatts measured during each 15-minute demand interval.

2. Sign Up for Load Control Programs

Load control programs may or may not be right for your business, and involve the use of a switch that controls how much electricity you are able to draw from the power grid at a given time. This might mean that your air conditioning and heating systems only run at certain times, or that other high-usage appliances or equipment aren’t functioning unnecessarily, such as when there are fewer people in the building.

3. Invest in a Solar Panel System

Investing in solar comes with a suite of benefits and impressive ROI. By installing solar panels to produce electricity for your equipment, you can significantly reduce the demand you place on the grid, and subsequently, reduce your commercial electricity demand charges. Solar panel systems also offer an average ROI of 20 percent in the first year of use. However, you’ll only have power when there is daylight, and you’ll still need to rely on the grid as a backup or if you have heavy energy demands that your panels can’t entirely keep up with.

4. Invest in an Energy Storage Solution

Storing energy in lithium batteries opens up a whole world of cost savings, and can significantly reduce or even potentially eliminate your commercial electricity demand charges as a whole. By combining a solar panel system with lithium battery storage, you’re able to generate, keep, and use as much electricity as your business needs so long as your system is large enough to support your daily activities. You can even sell energy back to the grid if your system generates a surplus, or you can store it for later use.

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