Struggling to explain demand charges to a new commercial client. They understand energy charges (kWh) but can't grasp why they're paying $15/kW for demand when they only hit peak for 15 minutes. Anyone have a good analogy that clicks with customers?
Demand charge vs energy charge - customer education
Both good analogies. I also show customers their load profile graph - visual helps them see the peak spike that drives demand charges. Most don't realize their 15-minute coffee break startup routine costs $200/month in demand charges.
These are all helpful. My client's peak is actually from HVAC startup at 7 AM - 340 kW spike when everything kicks on simultaneously. Rest of day averages 180 kW. That 15-minute spike costs them $2,400/month extra.
Leah, that's a perfect example for load management. Staggering HVAC startup by 10-15 minutes could cut their demand charge in half. Simple timer adjustments, huge savings. Customer will love you for finding that.
Water heater timers work great too. Had a hotel client reduce demand by 80 kW just by scheduling water heater cycles. $1,200/month savings for $400 in timer equipment. Easy win.
Leah, I use the highway analogy. Energy is like gas consumed on a road trip. Demand is like paying for the highway infrastructure needed to handle rush hour traffic - even if you only use all lanes for 15 minutes, the road had to be built for peak capacity.
I like the restaurant analogy better. Energy is like paying for food consumed. Demand is like reserving the biggest table in the restaurant - you pay for the table size regardless of how long you sit there.
Randy's right about load profiles. I create a simple bar chart showing their hourly usage vs their peak 15-minute interval. Usually shows peak is 30-40% higher than average load. That difference is what they're paying demand charges for.