Peak Shaving

Peak shaving is an energy management strategy used to reduce a facility’s electricity demand during peak load hours, helping lower utility demand charges, ease stress on the electrical grid, and optimize total energy costs.

In modern solar designing and storage workflows, peak shaving is essential for creating intelligent energy systems that combine solar PV, battery energy storage, and load control. EPCs, installers, and energy engineers model peak shaving to improve system economics and present stronger financial cases in solar proposals.

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• Peak shaving reduces electricity demand during peak periods.
• Demand charges—not energy use—often drive savings.
• Batteries, solar, and load controls are core components.
• Solar + storage delivers the most scalable results.
• Accurate load analysis and battery sizing are critical.
• Strengthens ROI and financial modeling for commercial projects.

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What It Is

Peak shaving is a form of demand-side management where a building limits how much power it draws from the grid during high-demand periods. This is commonly achieved by:

• Dispatching a Battery Energy Storage System (BESS)
• Adjusting or shifting controllable loads
• Using real-time solar generation to offset spikes
• Applying automation through an Energy Management System (EMS)

In solar engineering, peak shaving closely interacts with solar layout optimization, stringing & electrical design, and battery sizing, because load behavior directly affects inverter selection, wiring limits, and storage requirements.

How It Works

Peak shaving works by anticipating when a site’s electrical demand will spike and supplying part of that power from non-grid sources such as batteries or solar.

Typical Workflow

1. Analyze Load Profile
2. Engineers study interval data from smart meters to identify recurring demand peaks.
3. Tools like Shadow Analysis help estimate how real-world shading and solar availability influence peak periods.
4. Calculate Demand Charges
5. Many utilities bill customers based on the single highest kW draw in a billing cycle, also known as a demand charge.
6. Size Battery & Controls
7. Using historical load data, designers determine the required battery power (kW) and capacity (kWh). This step is often validated with the Battery Size Calculator.
8. Dispatch During Peak WindowsWhen demand approaches the limit:
   • Batteries discharge
   • Solar offsets consumption
   • Non-critical loads are reduced or delayed
9. Flatten the Load Curve
10. The result is a smoother demand profile, improved load factor, and lower monthly utility costs.

Peak shaving becomes even more effective when solar production and storage dispatch are coordinated through advanced solar designing tools.

Types / Variants

1. Solar-Integrated Peak Shaving

Solar generation reduces grid draw during daytime peaks, especially effective for commercial sites with high midday loads.

2. Battery-Based Peak Shaving

Batteries discharge during peak periods regardless of solar availability—useful for evening or early-morning demand spikes.

3. Hybrid Solar + Storage Peak Shaving

The most common approach. Solar reduces baseline demand while batteries shave residual peaks, improving ROI for commercial solar systems.

4. Load-Shedding Peak Shaving

Non-essential loads such as HVAC, EV chargers, or compressors are temporarily reduced or shifted.

5. Generator-Assisted Peak Shaving

Backup generators support peak periods when battery capacity is insufficient—more common in industrial or remote sites.

How It’s Measured

Peak shaving performance is evaluated using the following metrics:

1. Peak Demand Reduction (kW)

Peak Shaved (kW) = Original Peak (kW) − New Peak (kW)

2. Energy Used for Shaving (kWh)

Total battery discharge during peak intervals.

3. Demand Charge Savings

Savings = Peak Reduction (kW) × Utility Demand Rate ($/kW)

4. Load Factor Improvement

A flatter load curve improves operational efficiency and grid interaction.

These values are typically modeled alongside system performance estimates in solar proposals.

For Solar Designers

• Analyze demand curves early—battery sizing depends more on peak kW than total kWh.
• Align system layouts with solar layout optimization and stringing & electrical design.
• Use sun-position insights from the Sun Angle Calculator to estimate solar contribution during peak hours.

For EPCs & Installers

• Recommend hybrid solar + storage solutions for clients with demand-based billing.
• Clearly visualize peak shaving savings in solar proposals.
• Coordinate battery systems with interconnection and AHJ compliance requirements.

For Developers & Energy Managers

• Target facilities with motors, HVAC, refrigeration, or EV fleets.
• Benchmark savings against historical utility bills.
• Combine storage with smart load controls for deeper peak reduction.

For Sales Teams

• Emphasize cost avoidance, not just energy generation.
• Use insights from the Solar Designing Hub and Solar Business Growth & ROI Hub to build data-backed pitches.

Real-World Examples

Residential Example

A home with solar and battery storage discharges during evening demand spikes, reducing time-of-use and peak-related charges.

Commercial Example

A grocery store offsets refrigeration and HVAC peaks using a battery system, lowering demand charges by thousands of dollars annually.

Industrial Example

A manufacturing plant combines onsite solar with large-scale storage to flatten loads above 1 MW, significantly improving operational economics and grid stability.

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• Battery Energy Storage System (BESS)
• Demand Charge
• Load Factor
• Solar Layout Optimization
• Stringing & Electrical Design
• Inverter Clipping
• Energy Management System (EMS)

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