Solar Energy Show

Homes are billed for electricity based on the amount of energy they consume (measured in kwh). But commercial facilities often get an additional charge for the peak amount of power they consume during each month (measured in kw). These demand charges are designed to compensate the utility for the peak generating capacity that they must provide when large motors, air conditioners and other commercial processes are started up (power draw from motors is highest when the motors start). For example, a medium commercial customer may pay a demand charge of $20 per kw based on the peak usage in any given 15 minute period during a month. So if they had several large industrial processes start while their air conditioning and lighting was also operating, they could experience a peak power draw of 200 kw -- and they would be billed for a $4,000 demand charge that month. These demand charges can be dramatically reduced if large equipment is not started within the same 15 minute time period, and if other loads (such as