Demand Charge Reduction Savings
Quantify the value of shaving peak demand. Provide your utility's $/kW demand rate and the kW you expect to cut to reveal monthly savings and the annualized impact across billed months.
Check your tariff for ratchets, seasonal riders, and taxes that could change the bill impact.
Examples
- $18 per kW demand charge with a 150 kW reduction, charged 12 months ⇒ Monthly demand savings: $2,700.00 USD • Annualized savings (12 months billed): $32,400.00 USD.
- $30 per kW demand charge with a 50 kW reduction, only 10 billed months ⇒ Monthly demand savings: $1,500.00 USD • Annualized savings (10 months billed): $15,000.00 USD.
FAQ
Does this include energy (kWh) savings?
No. It isolates demand-charge avoidance. Layer kWh savings separately for a full utility impact.
How accurate is the kW reduction input?
Use interval data or a demand study to estimate the sustained peak reduction your project can deliver.
What if my utility has on-peak and off-peak demand charges?
Enter the rate and kW tied to the charge you are targeting (often on-peak). Run separate scenarios if multiple charges apply.
Additional Information
- Result unit: USD of avoided demand charges per billing cycle and across the billed months set.
- Defaults assume demand charges apply in all 12 months; adjust months for seasonal tariffs.
- Savings assume the kW reduction is sustained through the utility's peak measurement interval.