How Energy Storage Can Lower Hidden Costs

Published June 20, 2017

How Energy Storage Can Lower Hidden Costs

DATE PUBLISHED: June 20, 2017
Category: Blog Article

Any business that consumes a lot of energy knows that the cost of energy depends not just on how much you use but how and when you use it.

Conceptually, the grid works like any other market, ruled by the laws of supply and demand. You pay not just for the amount of power you use, but when you use it. If customers all need power at the same time, such as a hot summer afternoon, this means there is strong demand and that the supply needs to be managed to meet that demand. At the grid level, we have limited ability to store energy for these times of heavy use. Usually, that means grid system operators need to call on expensive “peaking plants” which can skyrocket the costs of electricity.

To capture these additional costs and better manage the electric system, energy consumers are charged in several different ways based on their energy usage profiles. We have listed four different opportunities where storage could dramatically lower your costs. Keep in mind that these charges may not apply to every customer based on your location, energy provider and specific incentives and policies.


Power Factor Correction: Ongoing

Problem: Energy consuming equipment can be inefficient in the way it uses electricity, known as power factor.

Solution: Certain storage technologies can improve power factor resulting in a more efficient use of energy.

Reduce Capacity Charges: Annual

Problem: Capacity charges are based on a customer's peak usage per year.

Solution: An energy storage system can be used to reduce a customer's peak usage and the associated demand charges.

Reduce Demand Charges: Monthly

Problem: Demand charges are for a customer’s peak usage during the monthly billing cycle.

Solution: An energy storage system can be deployed to avoid these monthly peaks.

Manage Time of Use Optimization: Daily

Problem: Sometimes customers can be charged more for using power during periods of peak demand during the day.

Solution: An energy storage system can allow you to shift your peak load away from high demand times during the day.

Solar is the Foundation:

Obviously, any energy storage system will require energy to charge it. A solar energy system makes a great platform to enhance an energy storage system providing the benefits of reduced costs, dependability and lower emissions.

These opportunities will vary based on your energy consumption profile, location, electricity providers and evolving regulations. If you want to reduce these “hidden energy costs” Solect can do the analysis to find the best solution. We have the expertise to analyze your energy consumption patterns then match that to the specific requirements of your energy provider and the relevant incentives and regulations. We are also deeply involved in the development of new policies, so you can be sure that we will be providing solutions that will work with the evolving market.