Commercial electricity customers, in GS-2 or GS-3 rate schedules, in the California market are billed by the utility for the electrical usage (KWh) and an electrical peak demand charge (KW). The electrical demand charge or peak demand charge (KW)is the highest rate of electrical usage during any 15 minute period during the month. Thus, the peak demand charge determines the cost for the entire month and is billed at between $10 and $30 per KW. Commercial electrical customers with un-balanced load profiles can incur electric demand charges of 2 to 3 times the amount for actual energy used. Un-balanced load profiles are caused by multiple large loads being on simultaneously. Large appliances like air conditioners, water heaters, space heating, and refrigeration are the main factors contributing to peaks in electrical demand profiles. The most effective method for controlling demand charges and flattening out demand peaks is by time shifting of loads through an automatic demand controller. The use of a demand control energy management system can reduce summertime electric bills by 10 to 40%.
The price of batteries finally makes financial sense for demand control strategies. An inverter connected in parallel with the utility grid and a bank of Lithium Ion batteries and Battery Energy Storage Systems are an integral part of electrical demand management. You don't have to wait for Tesla, it is a reality now.
A roof or carport mounted solar PV system not only generates electricity (KWh) to offset usage, it also helps to lower peak demand (KW). Solar's peak generation is coincident with most commercial peak loads like air conditioning, so it can reduce demand. A little known benefit of solar is that it qualifies for a renewable energy rate schedule with many utilities, such as, Edison. The renewable energy rate change alone can account for 75% of the benefit from solar.
Participation in your utilities Demand Response program is a great way to earn monthly bill credits. During utility peak demand you lower your electrical usage. This can be done automatically with a demand controller.