Private in-browser planning
Demand Charge Savings Calculator
Starting values are hypothetical. Replace them with your own figures. Inputs stay in this browser and are not included in the energy inquiry.
- Use billed demand for the same charge component in each case.
- The selected reduction must apply in every period counted.
Find the demand line that can actually change
Locate the relevant demand component on the bill or tariff. Record its rate, unit and billing window. Some accounts have more than one demand charge, and the billed kW may reflect a ratchet, minimum, power-factor adjustment or a time-specific peak. This tool treats a single component with the same rate in each selected period.
Use billed demand for both scenarios. Equipment ratings describe possible load rather than the account’s coincident measured peak. Turning off a 20 kW machine will not necessarily reduce billed demand by 20 kW if it was not operating during the peak interval, or if another process creates the next-highest interval. Interval data is needed to support a credible reduction assumption.
The calculation and a simple illustration
Original charges equal original billed kW multiplied by the demand rate and the number of billing periods. Proposed charges use the proposed billed kW with the same rate and period count. Their difference is signed savings. Entering a higher proposed demand produces a negative difference, showing a modeled cost increase instead of hiding it.
For illustration, reducing billed demand from 200 kW to 180 kW at $15 per kW saves $300 for one applicable period. If the reduction genuinely applies to six comparable periods, the modeled difference is $1,800. Multiplying by twelve without evidence that the reduction persists through all twelve periods would overstate the result.
Distinguish peak reduction from load shifting
A control sequence that staggers equipment starts may reduce coincident demand while leaving total kWh nearly unchanged. A conservation project may reduce kWh but leave the highest interval intact. Both can be useful, but their cost mechanisms differ. Calculate the demand and energy components separately before adding a project’s modeled benefits.
Check whether shifting operation changes time-of-use energy charges, production constraints or occupant conditions. A lower peak in one window can create a higher peak in another. This page does not model dispatch, batteries, controls, rebound demand or operating feasibility, and its output should not be treated as an equipment recommendation.
Investigate billing floors before committing money
Historical demand ratchets or minimum billing demand can prevent a physical peak reduction from immediately reducing the billed quantity. In that case, use the peak-demand estimator to explore the applicable floor, then bring the resulting billed kW into this calculation. Confirm the lookback period and percentages directly in the current tariff.
Keep original interval data, calculation dates, operating assumptions and the tariff version with any project case. Compare modeled savings with installation cost, ongoing maintenance and operational effects. After a change, verify actual bills across the affected seasons. This calculator supports a preliminary bill-component comparison; it does not establish measured savings, a project payback guarantee or utility approval.
Sources & scope
Primary references reviewed October 15, 2026. These sources support the stated concepts; actual tariffs, program rules and signed agreements govern the account. Decision examples and operational worksheets are original educational analysis.
- DOE FEMP: Evaluating Your Utility Rate Options
Energy charges, demand charges, fixed charges and tariff structures; practical limits of simplified rate calculations. - DOE: Energy Management for Motor-Driven Systems, Example 12
Load factor = kWh / (peak kW × 24 × billing days). Source is used for the formula, not dated cost or performance benchmarks.