Homes are billed for electricity based on the amount of energy they consume (measured in kwh). But commercial facilities often get an additional charge for the peak amount of power they consume during each month (measured in kw). These demand charges are designed to compensate the utility for the peak generating capacity that they must provide when large motors, air conditioners and other commercial processes are started up (power draw from motors is highest when the motors start).
For example, a medium commercial customer may pay a demand charge of $20 per kw based on the peak usage in any given 15 minute period during a month. So if they had several large industrial processes start while their air conditioning and lighting was also operating, they could experience a peak power draw of 200 kW — and they would be billed for a $4,000 demand charge that month.
These demand charges can be dramatically reduced if large equipment is not started within the same 15 minute time period, and if other loads (such as air conditioning and EV charging) are temporarily shed (turned off). Demand charges can also be reduced if there is battery storage that can be quickly activated so that the spike of power is provided locally (by the customer's batteries) — instead of by the utility.
Surprisingly, the fastest growing market for battery storage systems is for applications that reduce demand charges or provide other grid power support -- NOT to store daytime solar energy for night time use.
My guest on this week's Energy Show on Renewable Energy World is Vic Shiao, CEO of Green Charge Networks. They have developed software and control systems that sense when demand charges are reaching a peak (by measuring current draw on large circuits), and then activate a battery storage system to provide an alternative source of power so that the extra kw demand is not supplied (and billed) by the utility. Please Listen Up as Vic explains how commercial customers can reduce their electricity costs by combining battery storage and control systems to reduce demand charges.
About The Energy Show
As energy costs consume more and more of our hard-earned dollars, we as consumers really start to pay attention. But we don't have to resign ourselves to $5/gallon gas prices, $200/month electric bills and $500 heating bills. There are literally hundreds of products, tricks and techniques that we can use to dramatically reduce these costs — very affordably.
The Energy Show on Renewable Energy World is a weekly 20-minute podcast that provides tips and advice to reduce your home and business energy consumption. Every week we'll cover topics that will help cut your energy bill, explain new products and technologies in plain English, and cut through the hype so that you can make smart and cost-effective energy choices.
About Your Host
Barry Cinnamon is a long-time advocate of renewable energy and is a widely recognized solar power expert. In 2001 he founded Akeena Solar — which grew to become the largest national residential solar installer by the middle of the last decade with over 10,000 rooftop customers coast to coast. He partnered with Westinghouse to create Westinghouse Solar in 2010, and sold the company in 2012.
His pioneering work on reducing costs of rooftop solar power systems include Andalay, the first solar panel with integrated racking, grounding and wiring; the first UL listed AC solar panel; and the first fully “plug and play” AC solar panel. His current efforts are focused on reducing the soft costs for solar power systems, which cause system prices in the U.S. to be double those of Germany.
Although Barry may be known for his outspoken work in the solar industry, he has hands-on experience with a wide range of energy saving technologies. He's been doing residential energy audits since the punch card days, developed one of the first ground-source heat pumps in the early ‘80s, and always abides by the Laws of Thermodynamics.
Lead image: Green microphone via Shutterstock