Tips for Reducing Summer Peak Demand Charges
When you’re running a business in an environment like Phoenix, Arizona, it can be hard to find a balance between keeping building occupants cool especially in the summertime. As a state, we have evolved from insulating our buildings with adobe clay and saguaro cacti to the beloved air conditioner. Long gone are the days of having to reside along the salt river in order to stay cool, even in Arizona, with over 100 days of over 100-degree-weather every year.
When everyone in Arizona has the common goal of staying cool in one of the least adaptable environments for living (in the world), fueling your A/C units can lead to huge spikes in your electricity demand charges.
Your Summer Energy Consumption
When the temperatures reach above 100 degrees, it takes 30% more energy to run your company’s air conditioner. What’s worse than the amount of energy you need to consume in order to cool your building, are the demand charges associated with that energy. Summer demand charges peak between 10am and 10pm, due to cooling your property during the hottest part of the day.
The issue with this common trend is that it can cause an energy overload. Demand charges occur because utility companies want to avoid a power overload, so they penalize users who consume the most amount of energy during “peak demand” by increasing their energy bill. A large part of your monthly utility bill is based off of demand charges, which charge you in intervals based on the time you use the most energy compared to your service area. So the question becomes, how can you reduce your electrical demand charges to reduce your electric bill?
How to Reduce Demand Charges this Summer
While demand charges will be the highest expense on your electric bill all year round, they become even more of a burden in the summertime. The global average temperature has exceeded its normal temperature for the 350th month in a row, so the following information will be extremely value for any financially and environmentally conscious business.
Reduce Your Peak Load
The key to reducing your demand charge is to reduce your peak load of energy. Your peak load is the point at which you are using the most amount of energy. This consumption period can be identified fairly easily, as it ends up being the obvious outlier on your monthly electric bill.
For example this image displays a spike (peak) in energy at 10am, which is usually the time when machines, lights, and all other systems are turned on to begin the day. When something is powering up or turning on, the initial rush of energy uses 600% of its normal amount in the first few seconds.
How to Calculate Peak Demand?
Knowing when your peak demand will occur, is the first step to reducing your demand charges, as well as your overall electric bill in the summertime. Understanding when your peak demand is, will also help you in implementing the staggered start energy saving strategy. Luckily, there are many (fairly easy) ways to figure this out.
Your utility company offers information on when the peak demand is going to occur. Some utility companies offer services to notify their customers of when the peak demand will be, in an effort to scatter their energy usage.
The Staggered Start
One way to reduce this surge of energy is to use a strategy called a “staggered start”. A staggered start means that you turn these systems on in intervals rather than all at once.
Another way to reduce summer demand charges, as well as your overall summer bill, is to start up your building before 10am so that it is up and running before the peak demand.
Using the staggered start and avoiding peak demand is especially crucial in commercial real estate buildings and facilities like cold storage and produce facilities. The reason being that these buildings are typically larger, which means they consume more energy than an average home or even a small store might. This can end up being a huge cost that significantly affects your bottom line, which decreases your net operating income (NOI) and overall property value.
Get Creative with Fans
Air conditioning usage is significantly more expensive in the summer than it is in the winter. So an alternative option might be using a fan, which can decrease the building temperature by 4 degrees. If the fan is implemented in the hottest part of the day – the peak demand – it is much more energy efficient than an air conditioner running on its own, while helping to keep your building cool.
Leverage IoT Technology
Naya leverages IoT technology to monitor device-level telemetry data, which provides deep understanding of real-time building and equipment energy usage. It works by using electronic sensors and software that connect the usage of internet, properties, and mobile application that are then integrated to the internet. The data that is integrated to the internet uses data analytics to take out any applicable information.
Once many systems end up connecting together, it becomes an intelligent system of systems. The more companies that switch to IoT technology, the stronger and more intelligent the systems of systems becomes. With a growing field of sustainability and technology it is obvious that there has been and predicted to have continuous growth in IoT technology.
The U.S. is Heating Up
In a twelve month span, from 2017 to 2108, electric generation has increased by 9.3%. Reasons for this gain is a 19.9% increase in gas fire plants, a 51.6% increase in solar energy, and a 29.3% increase in wind powered energy. The increases in more environmentally friendly energy sources likely mean there is a decrease in energy sources such as gas fired energy and coal consumption. While this is true, fossil fuel still remains the countries second largest energy source. But at the end of the day, progress is progress, and any progression that makes our energy consumption more efficient, is good for our shared home, mother earth.
Decrease Energy Consumption and Save Money on your Electric Bill
Implementing Naya Energy’s IoT technology can help decrease your wasted energy and help you consume energy more efficiently. In some areas of the nation, there have been increasing prices up to 35 cents for residential properties and 15 cents for commercial and industrial properties. Finding a system that helps measure and decrease your energy consumption could completely alleviate your summer peak demand charges while paying itself off and delivering a quick ROI.
Article written by Naya Energy contributor, Katie Devlin
If you’re interested in learning more about how you can decrease demand charges in the summer, fill out the form below and a Naya Energy representative will reach out to you shortly.