Demand charge

The demand charge is defined as the energy charge based on the highest demand, during any 15 to 30-minute interval that is measured in a billing period.

In many cases, electricity use is metered (and billed) in two ways by the utility:

first, based on your total consumption in a given month, and second, the demand, based on the highest capacity the user required during the given billing period, typically a 15-minute interval during that billing cycle.

Demand charge may be a fixed charge per kilowatt or divided into rate brackets: the highest charge on the first bracket, and lesser charges on the following brackets. The charge mode varies by different power companies. The integrator should optimize their algorithm to make the benefit maximized according to the site power supplier’s demand charge mode.