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A Day in the Life of Demand Charges in a Commercial Solar Building

Updated: Oct 16, 2019

Commercial solar building demand charges
Every solar building has a demand charge story

Let’s review a typical 24-hour day in the life of a commercial solar office building. It’s an important story because solar contractors and their prospects may not realize how seemingly innocent events can trigger a spike in demand charges, decreasing a solar project’s ROI and payback.

Our example case study is an 18,000 sqft Los Angeles office building with a 60 kW solar PV system and 6 rooftop HVAC units during a hot summer day. While this example is for an office building, DemandEx can also reduce demand charges in retail buildings, schools, churches, municipal buildings, car dealerships, and other non-industrial commercial solar projects.

We’ll start at midnight and then work our way through the day and night.

Midnight to 8:00am

During this time of night, office equipment in sleep mode and outdoor lighting are the main sources of electricity usage. But remember that our office building is in Los Angeles during the summer. Since there are no occupants at this time, the building’s thermostat has been set to 80 degrees to avoid the AC units from turning on.

At about 5:30am, the building’s solar PV system may be receiving its first rays of light, offsetting very little power. Meanwhile, DemandEx’s intelligent software isn’t asleep. It’s been thinking about the upcoming day, and it knows several things:

1. It knows the current building temperature.

2. It also knows that the weather forecast is for a hot day with intermittent clouds.

3. It knows that people will arrive on this morning at around 8am

4. It also knows the usage patterns for every day of the week, including weekends and holidays.

5. It knows that some of those people will be plugging in electric cars into the building’s charging stations.

6. It knows the typical solar kWh production for all times of the day.

As the sun starts to create more solar production, it’s also slowly heating the building.

Without DemandEx: Office workers arrive at around 7:30am and turn on the air conditioning, causing a sharp demand charge spike with little solar production to absorb the sudden peak. A few EVs arrive and plug in, causing another spike.

With DemandEx: At around 3am during the least expensive rate period, DemandEx has turned on the air conditioning, slowly pre-cooling the office to a comfortable 72 degrees. When the first office workers arrive, there’s no need to turn on the air conditioning. The people with EVs plug in, but DemandEx prevents a spike, staggering charging times when solar production is highest and completing the charge by 5pm.

8am – 12pm

The day is heating up, and so is solar production. The building is also filling up with people, increasing the internal thermal temperature from workers and their desktop computers.

Without DemandEx: To offset the increase in temperature, the typical smart thermostat automatically turns on, causing another demand spike that can’t be easily absorbed by the PV production.

With DemandEx: DemandEx has crunched the numbers. It knows the PV production, how many people are in the building, the minute-by-minute temperature trends, and anticipates the temperature rising. Slowly, it’s been pre-cooling the building, maintaining a comfortable temperature without any sudden demand spikes.

12 pm – 5pm

Solar PV production is offsetting much of the office building’s electricity and even some EV charging, thanks to DemandEx. However, at about 1pm, a cloud is passing over the rooftop solar array.

Without DemandEx: The cloud passes over. Without normal solar production, there’s a large spike in electricity demand, causing a high time-of-use charge at the highest peak rate.

With DemandEx: Before the cloud passed over, DemandEx pre-cooled the building slightly above the typical temperature and shut off the HVAC system, EV charging, and other flexible loads. A Demand charge occurs, but it’s much less than what it would have been if the HVAC and other loads were on.

Workers haven’t noticed any changes in their comfort level, but the building’s accountants recognize the 50% drop in demand charges at the end of the month.

5pm – Midnight

Workers start to leave, the building is getting cooler, and computers and equipment are shutting down while solar production is decreasing. EVs are also charged by 4pm. It’s such a nice day, the boss allows everyone to leave early. No one remembers to turn off the air conditioning.

Without DemandEx: The building’s HVAC system continues at the same temperature until a pre-programmed time. There’s less solar production, and it’s still hot, so there’s another demand spike when the building turns on the air conditioning, maintaining the set temperature.

With DemandEx: In addition to compensating for passing clouds and cost-effectively charging EVs, DemandEx knows solar production is getting lower. Because the building is closed, DemandEx allows the temperature to rise to its nighttime temperature. This smart adjustment avoids the usual evening demand charge and the energy costs of cooling an empty office building.

Savings and Payback

In terms of savings and ROI, our example office building has a $36,000 per year total electric bill, including demand charges, before installing solar. After installing solar:

Without DemandEx: A commercial solar contractor who installs a 60 kW system without DemandEx can project $17,000 in annual utility bill savings with a 6.5-year solar PV payback.

With DemandEx: If the same 60 kW solar system is installed with DemandEx, the commercial solar contractor can project a $20,500 annual utility bill savings with only a 5-year solar PV payback.

Of course, every building's usage patterns is different. To receive an estimate for how much you can save your commercial solar customers with DemandEx’s load flexibility software, contact Extensible Energy for a free consultation and demonstration.

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