Commercial electricity customers who are subject to high demand charges may be able to reduce overall costs using battery energy storage to manage demand, according to research by NREL.
The analysis represents the first publicly available survey of commercial-sector demand charges across the United States. By determining where high demand charges are located and the number of customers that may be paying them, researchers provide insight into the commercial battery storage market across the United States.
The white paper, Identifying Potential Markets for Behind-the-Meter Battery Energy Storage: A Survey of U.S. Demand Charges, details an analysis of more than 10,000 utility tariffs in 48 states. The findings indicate that approximately 5 million commercial customers across the country may be able to achieve electricity cost savings by deploying battery storage to manage peak demand.
Many medium to large commercial customers are subject to utility demand charges, yet customers often do not understand how these charges are structured or calculated. Demand charges are a portion of an electricity bill based on a customer’s peak level of demand and are typically based on the highest average electricity usage occurring within a defined time interval (usually 15 minutes) during a billing period. In many cases, these demand charges can account for anywhere from 30% to 70% of a customer’s electricity bill.