A dealer group called us with a straightforward question. They’d installed solar across multiple sites, and their bills hadn’t dropped anywhere near what they expected.
The answer was in the other half of the bill — the half solar was never going to touch.
It’s a common enough situation that we built a webinar around it with the Greater New York Automobile Dealers Association.
Here’s the recording, and the short version below.
Your Bill Has Two Parts. Solar Only Touches One.
Most commercial electric bills split into supply and delivery.
Supply is the energy you consume, measured in kilowatt-hours.
It is like a bucket you fill each month.
Demand/Delivery measures the size of the pipe delivering energy and covers the cost of getting that power to you when you ask for it — and that’s where demand charges live.
Solar produces kilowatt-hours. It displaces energy you would otherwise buy from a supplier, and it does that job well.
“Solar will really only impact that energy portion of your bill. It can’t reliably impact the demand portion. And that’s one of the things that can underlie a disappointing outcome from solar-only.”
Maria Fields, CEO and Co-founder, Sprocket Power
Why Demand Can Become a Bigger Share of The Bill
When we ran the analysis for that dealer group, the supply portion of the bill had clearly dropped.
The demand portion had not. It just kept going.
Demand has historically made up 30-40% of the typical utility bill, but that is rising, and
we expect that trend to continue as utilities look to pay for needed grid upgrades.
We now see that demand accounts for 50% or more of most utility bills.
One Bad 15 Minutes Sets Whole Month
A demand charge is based on your single highest 15-minute peak in the billing period. Not your average. Not your total. One peak.
That peak can come from a DC fast-charge session, an HVAC start-up, refrigeration and process equipment cycling together, or all of the above occurring in the same quarter hour.
On Long Island, you may also have time-of-use windows, which means you pay for that peak in more than one way, sometimes for the rest of the year.
Solar can help if the sun happens to be up at the moment the peak occurs.
Miss that window once, and the demand charge is set.
What Really Reduces Demand Charges?
Batteries and controls.
A battery is dispatched into the peak so the utility never sees it, and a controller coordinates the battery against site load, charging behavior, and rates in real time.
None of this requires anyone on your team to watch a screen.
“Automation is your friend in this. It’s not like you need a facility manager to come and operate some of it. This is all automated and in real time — you go on about your business.”
Maria Fields, CEO and Co-founder, Sprocket Power
Solar still has a role.
It fills the battery, and it keeps working on the supply half of the bill.
What Is The Better Investment?
Solar and battery can work together to contribute to a project’s ROI, each enhancing the
impact of the other.
But if you separate out the contribution of each in the investment analysis, the battery
often pulls more than its own weight financially and should be the first tool you turn to
for controlling utility costs.
That is because of its direct impact on the most expensive part of your bill – demand.
Watch Out For The Blended Rate
Some proposals divide your entire bill by total kilowatt-hours to produce a single blended rate, then apply it to projected solar output.
This approach will overstate the impact of solar on your total bill, Your actual ROI will be less.
It also quietly assumes solar offsets your demand charges, which it does not.
Ask for the analysis broken out: supply separately, demand separately, with your actual tariff applied.
It Starts With Your Interval Data
The detail you need sits in the interval data file from your utility, and getting it takes a few steps.
Once we have it, we can see minute-by-minute what’s driving your peaks, and model a system optimized to control your costs
“It doesn’t have to be this way. You don’t have to take it on the chin.”
Maria Fields, CEO and Co-founder, Sprocket Power
You Should Demand Performance Reporting
Once a project is installed, many businesses are left to manage system operation
themselves.
For solar-only, this is not optimal as it is often hard to tell if the system is
working well or at all.
For battery storage installations, active and expert optimization is essential – your
financial performance depends on it.
Make sure to work with a partner committed to standing behind that performance – and
ask to see results based on their prior work.
Working With GNYADA & Sprocket Power
Sprocket Power is a vendor in GNYADA’s Dealers Discount Club, the Association’s cooperative program for members, where vendors are vetted and overseen by the DDC Committee and Association staff.
We run bill and interval-data assessments for GNYADA member dealers at no cost, and we present regularly through the Association’s webinar and education program. You can find us on the member discount program page under utility costs and charger integration.
If your bill has gone up and you’re not sure which half is driving it, an assessment is the place to start.
