Many organizations focus on how much electricity they use, but when they use it can be just as important. Understanding peak demand and taking steps to manage it can help organizations reduce energy expenses, improve operational efficiency, and maximize the value of their solar and energy storage projects.
What Is Peak Demand?
Peak demand refers to periods when electricity usage reaches its highest levels at a facility and across the electric grid. These peaks are measured over different timeframes, including hourly, daily and annually, and directly impact an organization’s delivery and supply charges. For many organizations, relatively short periods of high electricity usage can result in higher electric bills. Distributed energy resources such as solar and energy storage are tools to mitigate these costs.
Why Does Peak Demand Exist?
Electricity demand varies throughout the day and throughout the year. To ensure reliable service, the electric grid must be capable of meeting demand even during periods of exceptionally high usage.
In New England, the regional power grid is managed by ISO New England, which is responsible for maintaining enough generating capacity to meet peak electricity demand. Maintaining that capacity comes at a cost, and those costs are ultimately reflected in customers’ electricity rates. As a result, organizations that can reduce electricity consumption during peak periods may be able to lower certain utility costs and improve their overall energy economics.
Peak Demand Management
Peak demand in New England most often occurs on hot summer afternoons when air conditioning use is highest. Organizations can prepare for these periods by implementing strategies such as:
- Pre-cooling buildings before anticipated peak periods and then adjusting thermostats upward during the predicted peak hours.
- Turning off unnecessary lighting and equipment in unoccupied areas.
- Reducing electricity use from nonessential equipment during potential peak periods.
- Avoiding EV charging during peak demand hours when possible.
- Installing solar and battery energy storage systems to reduce reliance on grid-supplied electricity during periods of high demand.
How Solar and Energy Storage Can Help
Solar energy can reduce a facility’s reliance on grid-supplied electricity during daytime hours, often lowering demand when electricity consumption is highest. Battery energy storage adds another layer of control by allowing organizations with behind-the-meter batteries to store electricity and discharge it during periods of high demand, helping to lower peak demand charges. When paired together, solar and battery storage can help organizations manage both energy consumption and peak demand, creating additional opportunities for savings.
Battery energy storage can help organizations lower peak demand without disrupting day-to-day operations. By discharging stored energy during periods of high electricity use, batteries can often reduce demand-related costs more effectively than operational curtailment measures alone.
In addition to lowering utility costs, battery storage may create opportunities to participate in programs that reward customers for supporting grid reliability. Programs such as ConnectedSolutions, Clean Peak, and ISO New England’s Installed Capacity (ICAP) market can provide financial incentives for reducing demand during periods of grid peak demand.
Taking Control of Your Energy Costs
Peak demand can have a significant impact on an organization’s energy costs, but it is also one of the areas where proactive energy management can deliver meaningful results. By understanding how and when peak demand occurs, organizations can identify opportunities to reduce costs while improving resilience and sustainability.
As a leading provider of solar and energy storage solutions, Solect Energy helps organizations evaluate and implement strategies that reduce peak demand and improve long-term energy performance. Contact us to learn how solar and battery storage can support your energy goals.
Source: Demand Charge Savings from Solar PV and Energy Storage, Energy Policy, Vol. 146 (November 2020).
June 8, 2026