How Peak Shaving Payback Is Calculated

Demand charges versus consumption charges

Consumption charges bill total energy. Demand charges bill the highest power drawn in any interval during the period - often a fifteen-minute window. A site can cut consumption significantly and see almost no change in the demand charge, which is why the two need separate analysis.

What data the model needs

Interval meter data over twelve months is the right input. It shows how often peaks occur, how high they reach and how long they last - the three numbers that set the power and energy rating of the storage system. Billing history alone gives a cruder estimate.

Power rating versus energy rating

Short, sharp peaks need power. Long plateaus need energy. Sizing on one and ignoring the other is the most common reason a storage system underperforms its model.

Verifying against the bill

The payback appears on a billing line item, so it can be verified directly. Compare the demand charge on the first two bills after commissioning against the model and retune the dispatch schedule if they disagree.