Saving Money On Your Demand Charges

While most of us think that we only pay for the electricity we use each month, there’s another aspect to our electricity bills: demand charge.

Most residential homes don’t need to worry about this charge, but industries and other large businesses often worry about this component to their energy bill. Here’s what you should know about demand charges and how to save money in the future.

What is a demand charge?

Demand charges are a different type of payment compared to the average amount of electricity that you use each month. The demand charge is the charge your business will have to pay based on your peak electricity usage during a billing period. The highest mark sets the demand charge for the entirety of the billing period. These are measured in increments of 15 minutes, meaning that you’ll have to pay more if your company uses a lot of electricity over short periods of time. On the other hand, should you use power at a more consistent rate, these charges will be lessened.

This demand charge exists to help out the electric companies. After all, your energy supplier needs to make sure they can meet sudden increases in demand. As a result, your business acquires charge for your highest point of energy use in the month. There are many ways to lower your total energy bill, such as insulating your hot water tank which can save 7%-16% a year on water heating. But lowering your demand charges are a little trickier. Here are some of the best ways to lower your demand charge this month.

How can I lower my demand charge?

The best way to lower your demand charge is by utilizing an energy audit. While certain power surges throughout the day might be vital to your company’s operations, there are still ways an energy professional can find ways to mitigate these high costs. Through energy management strategies and other energy insights, your auditor can determine how you can better use your energy throughout the day.

Keep in mind that there isn’t a one-size-fits-all energy strategy that will work across the board. That is why it’s vital that your business hires an energy professional. For example, an office might benefit from storing solar energy throughout the day. However, a restaurant with busier times throughout the day may need a more reliable energy source or better energy-efficient appliances to lower their energy use overall. If you can mitigate the peak of your energy uses, you’ll find that your bill will lower, in turn.

Another option for managing the cost is to consider using solar energy which has a smaller impact on the grid. Solar helps to offset the demand that is needed from the grid by providing an alternate source. Solar energy systems can even feed their excess electricity back into the grid creating a greater flow of energy in the grid, helping electric companies keep up with times of high demand. With more energy in the grid, supply increases to meet demand and companies can lower their energy charges.

When you want to take control over your demand charges, rely on the help of Energy Professionals.