Peak Demand

Peak Demand represents the maximum amount of electricity to be consumed in the grid during a given time (daily or seasonally) when numerous homes and businesses have equally called for amplified power at the same time. Typical drivers for peak demand are widespread use of air conditioners on hot summer afternoons, or the use of lighting and heating during the cold winter evenings. These times of high demand put a lot of strain on the electrical grid, which sometimes requires the activation of costly and less suitable “peaker” power plants to meet the surge. To the consumers, especially the commercial and industrial users, the peak demand can lead to increased costs of electricity heavy on demand charges. Under time-of-use (TOU) appliances, residential customers may also pay a higher rate during peak hours. With solar systems especially combined with battery storage, it can help to mitigate the peak demand as it will provide the self-produced energy during these peak hours, and this reduces the reliance on the grid and it may reduce the energy customers pay.