What is Peak Demand? Explaining kW versus kWh charges on your electric bills.

Electric bills are not as complicated as most people think.

Of course your utility doesn’t want to make it easy for you so they seem complicated, but if you spend a little time you can get the broad strokes pretty quickly. And that can lead quickly to money savings and increased energy efficiencies.

The best place to start is by understanding the kWh charges versus your kW charges. In other words, how much energy you consume and pay for per unit (kWh), versus the amount the utility charges you for making it available (kW).

Here’s our explainer to help make it clearer:

So this all means that if you can ensure your organization has flatter, consistent loads and avoids big spikes in usage, your bills will be lower than if you can’t.

WARNING! Peak demand is measured in 15-minute intervals. To show why this is relevant, a customer we recently started working with came to us with high summer bills, which obviously could be eased by solar power. However, what was truly shocking to them was that their peak demand surged due to a one-off event they held at their facility, where the kW charge doubled for the month costing them a small fortune and a long time talking to SCE on the phone!

These summer events are heavy on the A/C costs so it’s important to have a plan to keep the money in your pocket and away from the utility!