Q: What Is Peak Shaving?

A: Cutting Your Costs During the Time Periods You Use the Most Energy

Once someone moves out of their parents’ basement, they soon discover the urge to save money on their energy bill. This urge leads people to take action, which includes everything from energy efficiency improvements to solar power for their home to nagging their family members to turn off the lights when they’re not in the room.

This urge has led you here – looking into this idea of “peak shaving.”

How Residents and Businesses Can Save Big on Energy Using Peak Shaving

Peak shaving, or peak energy shaving, refers to the time of day when you use the most energy, your “peak” usage. Picture a bell curve, like the one you see here.

Peak shaving is shown visually in this graph as reducing electricity usage during the hours of greatest use

The black line represents one possible energy usage curve. This is fairly accurate for many businesses, most of whom use the majority of their energy during the day, except perhaps for restaurants and other nighttime businesses.

During the day at most businesses, their computers are on, lights are humming, phones are charging, and all the rest. For big companies, you’re talking hundreds or thousands of people in one building. Their energy use goes up as the day progresses, and then starts going down as people go home.

In warmer climates and certain times of year, air conditioning costs accelerate with each hour, peaking in the mid-afternoon sometime. In colder climates, the same is true, but for heating.

The green line on the same graph represents the idea behind peak shaving. It’s the attempt to drastically reduce your energy costs at the time of day when you’re spending the most on energy. For most businesses, this means in the middle of the day, often in the afternoon hours. For other businesses and for most home residents, the highest hours of use are probably in the evening.

But how can you achieve peak shaving?

Suppose you’re a fairly large business and you spend $20,000 a month on energy bills. A large chunk of this energy is used between 10am and 3pm. So if you could cut your costs during that time by 50%, you’re eliminating a huge portion of your energy bill. Sounds great, but how do we do it?

3 Strategies for Peak Shaving

1. Use an alternative localized power source during peak times of day.

This would be something like an on-site generator, solar panels, wind, or some other method. Each of these also have their own costs, so the key is to track those costs verses the savings on your bill.

Of these, a generator system is the worst option since it depends on the cost of fuel – something also outside your control (not to mention the noise or the smell).

But all these work because now you’re providing energy that doesn’t get billed by the power company. You’re not reducing usage; you’re altering the source of the energy.

We talk about the hours between 10am-3pm for two reasons. First, these are the hours when many businesses are using the most energy – their “peak” energy usage. Second, this is when the sun is highest in the sky. So with some nice afternoon sun, solar panels can provide a good portion of your energy during the time of day your need it most. Solar is ideal for peak shaving for any daytime business.

2. Improve your energy efficiency.

The concept of “green buildings” is one attempt to accomplish this. With more windows, for example, you need less indoor lighting during certain times of day. With rooftop greeneries, the building itself absorbs less heat. But most existing buildings can’t make these kinds of improvements.

Still, you do have other options. You can change the lighting you’re using. Compact fluorescent bulbs and LED lights use a lot less energy than traditional bulbs. You can improve the air conditioning and heating efficiency by using adjustable speed drives for the fans. Find ways to reduce hot water usage, which could mean just lowering the maximum temperature in your hot water heaters. There are tons of ways to improve efficiency in addition to these that you can go research.

Combine strategies 1 and 2, and now you’ve got some real savings coming your way.

3. Utilize solar energy battery storage

This is actually the most profound method of peak shaving – especially if your peak usage isn’t during the hours of 10am – 3pm. If you combine battery storage with the first two strategies, your energy bills will put a big grin on your face.

How does this work? From 10am – 3pm, when the sun is highest in the sky, solar panels will collect the most energy. But what happens if they collect more energy than you need in those hours? Solar battery storage stores that extra energy so you can use it later when you need it.

If your solar energy system produces more energy than you need during the day, your batteries will use the excess into the evening and nighttime, as long as it lasts.

Battery storage, combined with solar panels and energy efficiency improvements, will cut your peak energy costs more than any other approach.

Especially if your optimal peak shaving time is in the evening, battery storage makes even more economic sense if you also have solar panels.

If you’re a homeowner who works during the day, for example, your home is probably empty during the best solar energy hours. All that great energy doesn’t get used. But with storage batteries, you can keep it all until the evening, when you use your oven, microwave, dishwasher, and phone chargers. Thus, you’re still able to reduce your energy costs during peak usage, even though the sun isn’t shining.

As a side benefit, even if the power goes out, your solar storage batteries sometimes allow you to keep your power running. Normally, grid-connected solar panels also stop working during a power outage because of the safety risks of an overload when the power gets restored. With batteries, you can keep using the stored energy while other people sit in the dark and eat cold canned food.

Want to see what how you can utilize peak shaving with solar panels or battery storage?

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