Cut costly peaks and stabilize energy bills fast. Model demand charges, incentives, and financing options. See savings, payback, and value across planning horizons now.
These examples illustrate how lower peaks can reduce demand charges. Replace with your site data for accurate planning.
| Scenario | Baseline Peak (kW) | New Peak (kW) | Demand Rate ($/kW-month) | Annual Savings ($) |
|---|---|---|---|---|
| Load shifting schedule | 300 | 270 | 20 | 7,200 |
| Process optimization | 250 | 215 | 18 | 7,560 |
| Storage + controls | 400 | 340 | 22 | 15,840 |
Demand charges commonly represent 20–60% of a commercial electricity bill when short spikes set the monthly peak. A facility running 250 kW at peak with an $18/kW‑month charge can pay about $54,000 per year in demand fees alone. Lowering that peak by 12% to 220 kW reduces annual demand cost by roughly $6,480, before maintenance or program costs.
Peak reduction is usually achieved by load shifting, sequencing large motors, optimizing HVAC staging, or using storage and controls to cap load during critical windows. Operational data often shows that a small set of events drives the maximum. Targeting those hours can produce measurable savings without cutting total production or comfort.
This calculator converts peak kW changes into annual savings using your demand rate and billing months, then subtracts annual O&M to estimate net savings. It also evaluates cash flows over a chosen horizon, applying an escalation rate to reflect rising tariffs and a discount rate to represent capital cost. The output includes payback, NPV, and an approximate IRR to compare alternatives consistently. A benefit‑cost ratio above 1.0 indicates discounted savings exceed net upfront cost. Sensitivity tests are simple: increase the demand rate by 10%, reduce the peak improvement by 20%, or raise O&M to reflect service contracts. These checks show which assumptions drive approval risk most overall.
For example, if a controls upgrade costs $15,000 and a $2,000 incentive applies, the net upfront cost becomes $13,000. With net annual savings near $6,000, simple payback is a little over two years. Extending the horizon to seven years and discounting at 9% can still yield a positive NPV if savings remain stable and O&M stays modest.
Use the scenario approach to test conservative and aggressive peaks, then export the results for budgeting. If your tariff includes seasonal demand rates, coincident peaks, or demand “ratchets,” treat the outputs as a planning baseline and validate with interval meter data. The most defensible cases combine measured peak histories, documented control strategies, and a clear cost breakdown.
It is a charge based on the highest power draw (kW) measured during the billing period. It is separate from energy charges that depend on total consumption (kWh).
Yes. Enter a reduction percentage instead. The calculator estimates the new peak by applying that percent to the baseline peak.
Discounted savings reflect the time value of money. Future savings are worth less today, so the discounted series uses your discount rate to convert each year’s savings into present value.
Escalation increases projected savings each year, often representing rising demand rates or avoided charges. If you expect stable tariffs, set escalation to 0%.
It is an approximate estimate produced by a numeric search for the rate that makes NPV close to zero. It can be sensitive when savings are small or the analysis period is short.
If net annual savings are zero or negative, payback is not meaningful. Review assumptions, reduce costs, or improve the peak reduction strategy before relying on payback.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.