Peak Shaving: Using Battery Storage & Solar to Reduce Peak Load
In most commercial and industrial buildings, electricity consumption fluctuates throughout the day. As equipment starts up, production ramps up, or HVAC systems respond to changing conditions, the building’s demand for electricity rises and falls.
Utilities must constantly balance this changing demand by adjusting the output of power plants so that electricity generation always matches what consumers are using. To ensure reliability, they also maintain enough generation and grid capacity to supply the highest demand that may occur during the year, even if that peak happens only a few times.
Maintaining this capacity comes at a cost, which is reflected in electricity tariffs. For many commercial and industrial customers, electricity bills include two components: an energy charge based on the total electricity consumed (kWh), and a demand charge based on the highest level of power required during the billing period (kW). Demand charges are typically calculated using the highest average demand measured over a short interval, often 15 minutes.
This means that even a brief spike in electricity use, such as several large systems starting at the same time, can significantly increase a building’s electricity bill.
So how can a building reduce these costs without changing how it operates? One answer is peak shaving.
What is peak shaving and how does it reduce electricity costs?
Peak shaving is the practice of reducing electricity consumption during periods of highest demand in order to limit demand peaks and lower electricity costs.
Instead of allowing consumption to briefly spike above a certain level, peak shaving strategies smooth the building’s load profile by keeping demand below a defined threshold. This helps avoid high demand charges, which are often triggered by a single short period of very high consumption.
In practice, facilities can achieve this in several ways. They may temporarily reduce non-critical loads, shift certain processes to a different time, activate on-site generation, or use battery storage to supply part of the demand during peak periods.
By limiting short spikes in electricity consumption, peak shaving allows buildings to maintain their operations while reducing the demand charges that can significantly impact their monthly electricity bill.
Peak Shaving with Solar and BESS
For many industrial facilities, significantly changing the load profile is not always feasible. Production processes, operational schedules, and equipment requirements often limit how much electricity consumption can be shifted or reduced.
However, peak shaving can still be achieved by combining on-site solar generation with battery energy storage systems (BESS).
Battery storage allows a facility to store electricity when it is inexpensive or readily available, and use it later when demand is high. For example, a battery can charge during periods of low electricity prices or when excess solar energy is being generated on site. The stored energy can then be discharged during peak demand periods to reduce the amount of power drawn from the grid.
By doing so, facilities can limit demand spikes and lower the demand charges associated with them.
In practice, this strategy can reduce electricity costs in several ways:
- Limiting peak demand, which helps avoid demand charge penalties
- Lowering the contracted maximum demand with the utility over time
- Using stored energy instead of expensive grid electricity during peak periods
Managing peak shaving with battery storage
One of the advantages of using battery storage for peak shaving is that the process can be largely automated.
A solar or energy management controller can monitor the building’s electricity consumption, solar production, and battery state in real time. Based on predefined rules, the system can decide when to charge the battery and when to discharge it to keep grid consumption below a defined demand threshold.
When properly configured, the system continuously optimizes energy flows without requiring constant manual intervention. This ensures that the battery is used at the right moments to reduce demand peaks while maximizing the value of locally generated solar energy.
Smarter peak shaving with advanced energy controllers
While batteries and solar panels provide the physical infrastructure for peak shaving, an intelligent controller is what allows these systems to work together effectively.
An advanced energy controller can analyze real-time consumption data, predict potential demand peaks, and automatically coordinate solar production, battery charging, and battery discharge. This ensures that stored energy is used precisely when it has the greatest impact on reducing grid demand.
Our ePowerControl series is designed to make this process simple and reliable. By continuously monitoring energy flows and applying control strategies, it helps facilities maximize the benefits of solar and battery storage while reducing electricity costs and protecting operations from unexpected demand spikes.
