Solar + Storage (Commercial) Calculator
Demand charge reduction from battery dispatch strategy.
About this calculator
Commercial electric bills bundle two very different charges — energy use billed per kWh, and demand charges billed per kW based on your single highest 15-minute usage spike each month — and pairing solar with a battery attacks both at once but through different mechanisms. This calculator assumes the battery is dispatched specifically to shave that peak: it models a fixed 4-hour peak demand window and calculates the battery's sustainable discharge as the lesser of its rated power or its usable energy spread over those 4 hours, then adds an assumed 30% of solar capacity that's presumed to still be generating during the peak window. Demand reduction is capped at whichever is smaller — that combined battery-plus-solar contribution, or the peak itself — and the resulting kW reduction is multiplied by your demand charge rate and by 12 months for the annual demand-charge savings.
Separately, energy savings come from solar production that either serves load directly or gets cycled through the battery first (assumed to be about half of daily solar output), with round-trip efficiency losses subtracted before the remaining usable kWh is valued at your energy rate. Total system cost combines solar cost-per-watt and battery cost-per-kWh, and payback is a simple cost-over-annual-savings figure with no financing costs or degradation modeled. The peak-window and peak-overlap assumptions are the calculator's biggest levers — a facility whose demand peak doesn't coincide with solar hours (an evening manufacturing shift, for example) will see meaningfully less real-world demand reduction than this model projects, since it doesn't verify when your actual peak occurs.
Inputs
Results
Total annual savings ($)
$56,248.00
How to Use This Calculator
- Enter solar capacity in kW DC and battery capacity in kWh with rated power in kW.
- Input current peak demand in kW and demand charge rate per kW per month from your utility bill.
- Set energy rate per kWh and peak sun hours.
- Enter solar cost per watt and battery cost per kWh.
- Review annual demand savings, energy savings, simple payback, and battery duration to size the system.
How the result changes with Solar capacity (kW DC)
| Solar capacity (kW DC) | Total annual savings ($) |
|---|---|
| 100 | $37,124.00 |
| 150 | $46,686.00 |
| 300 | $76,248.00 |
| 500 | $116,248.00 |
What each input means
- Solar capacity (kW DC)
- Installed solar DC capacity.
- Battery capacity (kWh)
- Usable battery energy capacity.
- Battery power (kW)
- Maximum battery charge/discharge rate.
- Current peak demand (kW)
- Building's current monthly peak demand from utility bill.
- Demand charge ($/kW/mo)
- Monthly demand charge rate from utility tariff.
- Energy rate ($/kWh)
- Average commercial electricity energy rate.
- Peak sun hours (PSH)
- Average daily peak sun hours.
- Battery round-trip efficiency
- Energy out / energy in. Lithium-ion: 85–92%.
- Solar cost ($/W DC)
- Installed solar cost per watt.
- Battery cost ($/kWh)
- Installed battery cost per kWh of usable capacity.
What each result means
- Total annual savings ($)
- Combined demand charge and energy savings per year.
- Peak demand reduction (kW)
- kW shaved from monthly peak demand.
- New peak demand (kW)
- Reduced peak demand after solar + storage.
- Annual demand savings ($)
- Yearly savings from reduced demand charges.
- Annual energy savings ($)
- Yearly savings from solar energy displacing grid purchases.
- Annual solar production (kWh)
- Estimated solar electricity generated per year.
- Total system cost ($)
- Combined solar + battery installed cost.
- Simple payback (years)
- Years to recoup investment from savings (before incentives).
- Battery duration (hours)
- Hours of discharge at rated power.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersSolar capacity (kW DC) = 200, Battery capacity (kWh) = 400, Battery power (kW) = 100, Current peak demand (kW) = 300 = 10 input(s) provided
- Calculate Total annual savingsTotal annual savings = annualDemandSavings + annualEnergySavings56248 = $56,248
- Calculate Peak demand reductionPeak demand reduction = min(160 = 160
- Calculate New peak demandNew peak demand = peakDemandKW - totalDemandReductionKW140 = 140
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
Why does the calculator assume a fixed 4-hour peak demand window instead of using my actual peak duration?
The battery's sustainable discharge rate depends on how long it needs to sustain output — a battery can discharge at full rated power for only a limited time before its usable energy runs out, so the calculator divides battery energy capacity by a 4-hour assumed window to find the power level it can hold that long. If your building's real demand peak is shorter or longer than 4 hours, the battery's effective demand-shaving contribution will differ from this estimate.
Why is only 30% of solar capacity assumed to contribute to demand reduction?
Demand charges are based on your single highest 15-minute usage spike in the billing period, and that spike doesn't necessarily occur at solar noon when production peaks — it might happen in the morning ramp-up, late afternoon, or be driven by equipment cycling unrelated to sun angle. The 30% assumption is a rough estimate of how much solar output is likely still available during a typical peak window; if your facility's actual peak reliably coincides with full solar output, real demand reduction could be higher than this projects.
How does the calculator account for energy lost when the battery charges and discharges?
It applies your entered round-trip efficiency (energy out divided by energy in) only to the portion of solar output assumed to cycle through the battery — modeled as about half of daily solar production. The resulting losses are subtracted from total annual solar production before that usable energy is valued at your energy rate, so a lower round-trip efficiency directly reduces annual energy savings, separate from the demand-charge savings calculation.
Why might my real-world demand savings come in lower than what this calculator shows?
The biggest risk is a mismatch between your facility's actual peak-demand timing and the calculator's built-in assumptions about the peak window length and solar overlap — a facility whose peak occurs during an evening shift, for example, gets no solar contribution at all despite what the 30% assumption projects. Because the tool doesn't verify your interval-level demand data, it's best treated as a sizing starting point rather than a guaranteed savings figure.
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