Demand Charge Calculator
A bill under a demand tariff — a charge on the highest power drawn in the month on top of the energy used — with the share the peak accounts for, the load factor that shows how peaky the site is, and the saving from shaving the peak.
A demand tariff charges for the highest half-hour of power in the billing period, in kilowatts, as well as for the energy in kilowatt-hours.
How the demand charge calculator works
A demand tariff charges for the highest half-hour of power in the billing period, in kilowatts, as well as for the energy in kilowatt-hours. A site that draws 12 kW for one half-hour and 2 kW the rest of the month pays the demand charge on the 12. The load factor — average power over peak — says how peaky the site is; a low one means the demand charge is buying capacity that sits idle, and shaving the peak with staggered loads or a battery cuts the bill directly.
Formula: bill = peak kW × demand rate + kWh × energy rate + daily × days; load factor = kWh / (peak × hours)
Worked examples
| Inputs | Monthly bill | Note |
|---|---|---|
| A 12 kW peak on a 1,500 kWh month | 510 | a peaky site |
| A flat load | 390 | demand well used |
| A high demand rate | 690 | demand dominates |
FAQFrequently asked questions
What is a demand charge?
A charge on the highest power you drew in the billing period — usually the top half-hour — in dollars per kilowatt, on top of the energy charge. It pays for the network capacity your peak needs.
What is load factor?
Average power over peak power. A site running flat out all month has a load factor near 100%; a home with an evening peak might be 20%. Low load factor means expensive peaks.
How do I shave the peak?
Stagger big loads — do not run the oven, dryer and car charger together — set the air conditioner to ramp, or use a battery to supply the peak. Each kilowatt removed saves the demand rate every month.
Is a demand tariff cheaper?
For flat loads, often: the energy rate is lower. For peaky loads it can cost more. Compare a month's bill both ways, or use this page with your interval data.
When is the peak measured?
Some tariffs count only the peak window — late afternoon and evening on weekdays. If yours does, enter the peak within that window, not the day's absolute maximum.
Where these figures come from
- International Energy Agency — Energy Efficiency — appliance consumption and standby power context
- US Energy Information Administration — the federal energy statistics agency
Last checked: September 2026. Appliance power figures are typical ratings; check the label on your own equipment, which is authoritative for it.