Find the peak before buying equipment
Download utility interval data, identify the date and time of the billed peak, and match that interval to operating events. A 25 kW reduction is worth $450 in a month with an $18/kW demand rate only when it lowers the quantity actually billed. Reducing a different interval may save energy but no demand charge.
Use a four-step peak review
- Confirm the tariff: interval, rate, on-peak window, ratchet, season, and minimum demand.
- Find the event: rank the highest intervals and check whether the peak is recurring or unusual.
- Identify contributors: overlay equipment, production, occupancy, charging, and weather records.
- Test controls: model a safe reduction and confirm that another interval does not become the new peak.
Peak-reduction options from lowest to highest complexity
| Approach | Example | Main limitation |
|---|---|---|
| Scheduling | Stagger sanitation, charging, or production starts | Process timing and labor constraints |
| Control sequencing | Prevent compressors or heaters from enabling together | Must preserve temperature, pressure, and service |
| Setpoint strategy | Pre-cool before an on-peak period | Weather, comfort, and rebound peaks |
| Efficiency | Reduce fan, pump, lighting, or refrigeration input | Saves demand only when operating at the peak |
| Battery storage | Discharge during predicted peak intervals | Capital cost, controls, duration, and degradation |
Avoid creating a rebound peak
Turning loads off temporarily is not enough. If every controlled device restarts together, the rebound interval can replace the original peak. Restore loads in stages and verify temperatures, pressure, state of charge, and production requirements.
A robust control sequence uses a site-level demand limit and priorities. Critical loads remain available, flexible loads are delayed or reduced, and recovery is staggered. Manual procedures can work for predictable peaks, but automated control is more reliable when load and weather change quickly.
Screen the financial value
Apply the formula across the months when the reduction is expected, then include energy changes, maintenance, incentives, control costs, financing, and operational risk. If a ratchet applies, the value of one avoided annual peak can extend beyond a single month. If the tariff changes soon, model both the current and proposed rate.
Frequently asked questions
What is the fastest way to reduce a demand charge?
The fastest low-cost opportunity is often preventing controllable loads from overlapping during the interval that sets the peak. The right action depends on interval data, operating requirements, and the tariff.
Will reducing monthly kWh lower the demand charge?
Not necessarily. An efficiency project lowers demand only if it reduces load during the peak interval. Savings that occur at other times can lower kWh without changing billed kW.
Can a battery eliminate demand charges?
A battery can reduce a peak if it has enough power, usable energy, control accuracy, and availability during the relevant interval. Economics depend on the tariff, degradation, capital cost, incentives, and other value streams.
How much interval data should a business review?
Start with at least a complete billing cycle and preferably a full year when seasonality, ratchets, or weather-sensitive loads matter.