As more people turn to solar power as a way to reduce their carbon footprint and save money on energy costs, it’s important to understand how different rate structures and energy storage options can affect their savings. Homeowners and businesses investing in solar power find that understanding and navigating the various rate structures and options can be difficult. How to understand Peak Shaving and Time of Use (TOU) rates.
Peak shaving and time-of-use (TOU) rates are related, but not the same.
Peak shaving refers to reducing a facility’s energy demand during periods of high electricity use, regardless of the applicable tariff structure. This may include using energy storage systems, adjusting production schedules, or reducing non-essential energy-consuming activities to avoid the high energy demand and costs that often occur during peak hours.
TOU rates, on the other hand, are rate structures offered by many utilities that vary the cost of electricity depending on the time of day. Typically, rates are higher during peak demand periods and lower during off-peak times. By shifting electricity use to off-peak hours, customers can save money on their energy bills.
While peak shaving can be used to reduce energy demand during peak periods, it is not limited to TOU rate structures. Peak shaving can be used regardless of the existing rate structure, and it can be useful even in situations where a facility is not subject to TOU rates. Similarly, while TOU rates encourage customers to shift energy use to off-peak hours, they do not necessarily imply maximum shaving.
Grid-tied solar systems can also be combined with Time of Use (TOU) rates and peak shaving strategies to further reduce electricity costs and optimize energy use.
Under a TOU rate structure, using a grid-tied solar system, you can generate your own electricity during peak demand periods and feed excess energy back into the grid, which can help offset higher electricity rates during these hours.
To maximize the benefits of a grid-tied solar system under the TOU rate structure, maximum shaving strategies can be employed. This includes reducing energy demand during peak hours, when electricity rates are highest, by storing excess energy generated by the solar system in battery storage systems. By using stored energy during peak hours, customers can reduce their demand charges and avoid paying higher electricity rates.
For example, during off-peak hours, a grid-tied solar system can generate excess electricity that can be stored in battery storage systems. Then, during peak hours, the stored electricity can be used to power the facility, reducing the need to draw power from the grid when electricity rates are highest.
Other peak shaving strategies that can be used in conjunction with grid-tied solar and TOU tariffs include demand response programs that encourage customers to voluntarily reduce energy use during peak hours.
If you’re considering solar and want to take your energy savings to the next level, combining solar with a battery system, using Peak Shaving strategies and time-of-use rates can provide a number of benefits. Here are the top five benefits.
- Reduced energy costs. by using solar panels, battery storage and peak shaving strategies during times of high power demand, you can significantly reduce your energy costs. Also, by taking advantage of time-of-use tariffs, you can shift your energy usage to times when electricity is cheap.
- Energy independence. With a solar and battery system, you can generate and store your own electricity, making you less dependent on the grid. With the right system, this can be especially useful during power outages, allowing you to continue using electricity even if the grid goes down.
- Increasing energy efficiency. combining solar with a battery system and peak shaving strategies can help you optimize energy use and reduce overall energy demand. This can lead to increased energy efficiency and reduced greenhouse gas emissions.
- Improved network reliability. by reducing peak power demand during high grid usage, you can help improve grid reliability and reduce the likelihood of power outages.
- Environmental advantages. By generating your own clean energy from the sun and using battery storage to reduce peak power demand, you can significantly reduce your carbon footprint and help fight climate change.
Overall, the combination of a solar battery system, peak shaving strategies and time of use can offer a number of benefits, from reduced energy costs to increased energy independence and environmental sustainability.
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