Path-Q Solar
Will a demand charge change the value of installing solar for my small business?
Answer
Yes. Demand charges can materially change solar's value because they are based on peak power drawn during specified intervals, not just total energy used. Solar may reduce a coincident daytime peak, but it may not reduce peaks occurring when solar output is low.
Key points
- The tariff may measure monthly, seasonal, or time-specific peak demand.
- Solar production and the business's load profile must be compared at the same time intervals.
- Load shifting, controls, or storage may sometimes address demand charges more directly than additional panels.
What it depends on
- Demand-charge calculation and measurement interval
- Timing and duration of business peaks
- Solar output during those peaks
- Export treatment and other tariff components
- Availability and cost of load management or storage
Risks and trade-offs
- Oversizing panels does not guarantee a reduction in demand charges.
- A brief peak from equipment can determine the charge for an entire billing period.
- Storage and controls may improve demand savings but add cost, maintenance, and operating complexity.
Information you may need
- Detailed tariff and demand-charge rules
- Interval demand data
- Operating schedule and major equipment loads
- Solar production estimate by interval
- Potential load-shifting or storage options
Your next step
What to do next
Request an interval-based analysis that models energy charges and demand charges separately under the business's actual tariff.
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Some details may depend on your location, installer, utility, incentives, regulations, or specific property.
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