Demand charge vs. energy charge – simply explained
Anyone assessing storage economically must split power costs into energy consumption and peak power. The two cost blocks respond differently to battery storage.
Energy charge: cost per kilowatt-hour consumed
The energy charge refers to the amount of energy a site consumes. It is usually stated in CHF/kWh or cents/kWh. A storage system does not automatically change total consumption; charge and discharge losses can even raise energy use slightly. The benefit arises when energy is used at a different time – for example with PV self-consumption or dynamic prices.
Demand charge: cost for the highest power drawn
The demand charge refers to the maximum grid power measured in a billing period. This power is measured in kW. For operations with short, high peaks, this cost block can be especially relevant.
Why storage targets the demand charge
Peak shaving is about reducing the highest grid-draw power. The storage does not have to supply the whole site, only the part above a defined cap level. This makes battery storage attractive for sites whose load profile contains a few pronounced peaks.
Why the tariff is decisive
Two operations with an identical load profile can achieve different savings if they have different tariff models. That is why WERAX always reviews load profile and power bill together. Without tariff data, a serious business case is not possible.
The energy charge values energy in kWh. The demand charge values power in kW. A battery storage system can influence both – but in different ways.
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