Peak Shaving
Peak shaving is the practice of covering a site's electricity demand from stored energy during the periods when power is most expensive or demand is highest, so the bill's time-varying components fall while the load itself stays where it is.
Peak shaving means discharging stored energy during the hours when electricity costs the most, or when a site's own demand is at its highest, so that less is drawn from the grid at exactly those moments. The load does not change. The source covering it does.
It targets two distinct parts of a commercial bill, and they behave differently. Energy charges are billed per kWh, so the battery earns on the spread between the expensive and the cheap period, and every day it cycles adds a day's saving. Capacity or demand charges are billed on the highest measured power draw in a billing period, so the battery only earns if it covers that single highest interval. One layer rewards doing it every day; the other rewards never missing once. Fixed charges are untouched by either.
The three limits that decide whether the case is real are the width of the price spread, the number of days a year the battery can complete a useful cycle, and the round-trip efficiency of the system. A site running 250 operational days is not capturing 365 cycles, and at 88% efficiency roughly 1.14 kWh has to be bought for every 1 kWh delivered.
Why it matters for solar installers
Peak shaving is what makes storage sellable to a business that is not worried about outages, and it is where storage proposals are most often overstated. A figure built by multiplying capacity by an average unit price by 365 days does not survive a finance director's questions. SolarVis simulates a battery hour by hour against the site's own interval consumption and its actual tariff periods, including demand charges, so the saving in the proposal is the saving the model produced.
Common questions
- Is peak shaving the same as load shifting?
- No. Load shifting moves the consumption itself to a cheaper time, for example running a process overnight. Peak shaving leaves the consumption where it is and covers it from storage instead of the grid. Load shifting is free but limited to what the site can reschedule; peak shaving costs capital but works on loads that cannot move.
- Does peak shaving require solar panels?
- No. A battery on a time-of-use tariff can charge from the grid at the cheap rate and discharge at the expensive one with no generation involved. Solar changes the economics by supplying part of the charge for free, but it is not a precondition.
- How is the saving calculated?
- It is the price spread between the expensive and cheap period, multiplied by the energy actually cycled, multiplied by the number of days the battery completes a useful cycle, minus round-trip losses. It is not capacity times the price of electricity times 365.
