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Commercial Demand Charge Review

🏢 Commercial demand charge review

Demand Charges Can Quietly Increase Your Business Electricity Bill. We Help You Control the Peak.

PowerIdeas.au helps businesses understand what demand charge means, why it appears on commercial bills, and how solar, battery storage and peak shaving control can reduce high demand events.

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What is demand charge?

Demand charge is based on your highest power draw, not just total energy use

Many commercial electricity bills include both energy usage charges and demand charges. Energy usage is usually measured in kWh. Demand is commonly based on how much power your site draws at its highest point during a billing period, often measured in kW or kVA.

This means one short high-load event can affect the bill, even if total energy usage is not unusually high.

Peak Demand × Demand Rate = Demand Charge
Example: if a business reaches a high demand level when air conditioning, ovens, pumps, machinery or EV chargers run at the same time, that peak can increase the monthly demand charge.
Why commercial bills have it

Why do retailers and networks charge demand?

Commercial customers can create short periods of high load. The electricity network must have enough capacity to support these peaks, even if they happen only briefly.

Network capacity

High demand requires more network capacity, so demand charges help recover the cost of supporting peak load.

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Business equipment

Air conditioning, refrigeration, ovens, pumps, compressors, machinery and EV charging can create high peak demand.

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Short peaks matter

Demand charges can be triggered by short high-demand periods, not only by total monthly consumption.

Why demand charge goes up

Common reasons businesses get high demand charges

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Equipment starts together

Why cost goes up: Air conditioning, refrigeration, pumps or machinery starting at the same time can create a large demand spike.
How to reduce: Stagger equipment start times and use control logic to avoid unnecessary overlap.
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EV charging adds peak load

Why cost goes up: EV chargers can add significant load, especially when charging during busy operating hours.
How to reduce: Use smart charging, load limits, off-peak charging and solar/battery coordination.
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Hot weather demand

Why cost goes up: Cooling systems can run harder during hot periods and create peak demand events.
How to reduce: Optimise HVAC schedules, pre-cool where suitable and reduce simultaneous loads.
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No monitoring or alerts

Why cost goes up: Many businesses only discover the peak after the bill arrives.
How to reduce: Use energy monitoring and alerts to identify peak events before they become repeat problems.
How to reduce

Demand reduction starts with controlling the highest peak

The goal is not only to use less energy. The goal is to reduce the short high-demand events that trigger the charge.

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Stagger loads

Avoid starting multiple high-load equipment items at the same time.

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Increase solar self-use

Use solar generation to support daytime business load where possible.

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Install battery storage

Use a battery to discharge during short peak demand events.

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Add monitoring

Track peak events and use alerts to manage load before it becomes costly.

Battery peak shaving

How battery peak shaving can be set up

One practical way to reduce demand charge is battery peak shaving. The battery is configured to discharge when site load approaches a selected demand limit, helping prevent the site from setting a new high peak.

Analyse the bill and load profile

Review demand charges, kW/kVA peak, tariff rules, operating hours and interval meter data if available.

Choose a demand limit

Set a practical target threshold so the battery discharges when site load approaches that level.

Configure battery discharge control

Use inverter/EMS settings so the battery responds to real-time load and reduces grid import during peak events.

Monitor and adjust

Track performance after installation and adjust thresholds as business load changes.

✅ Battery peak shaving may work well when

  • Demand charges are a meaningful part of the bill
  • Peak demand events are short and predictable
  • Business load happens during solar generation hours
  • There is enough battery capacity to cover peak events
  • Monitoring and control settings are properly configured

⚠️ Benefit may be limited when

  • Demand charge is small or not applied to the tariff
  • Peak demand lasts too long for the battery size
  • Load profile is highly unpredictable
  • Battery is not configured for peak shaving
  • There is no monitoring to confirm demand reduction
Start here

Upload your commercial electricity bill for a demand charge review

We will review your demand charges, load patterns and whether battery peak shaving or energy management may reduce business energy costs.

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This section uses your live commercial bill upload form.
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