How to Estimate Demand Charge Savings from PV on Commercial Buildings

Pieter Gagnon, Lori Bird

Research output: NRELFact Sheet


Rooftop photovoltaic (PV) systems are compensated through retail electricity tariffs - and for commercial and industrial customers, these are typically comprised of three components: a fixed monthly charge, energy charges, and demand charges. Of these, PV's ability to reduce demand charges has traditionally been the most difficult to estimate. In this fact sheet we explain the basics of demand charges, and provide a new method that a potential customer or PV developer can use to estimate a range of potential demand charge savings for a proposed PV system. These savings can then be added to other project cash flows, in assessing the project's financial performance.
Original languageAmerican English
Number of pages4
StatePublished - 2017

NREL Publication Number

  • NREL/FS-6A20-69016


  • demand charges
  • photovoltaic
  • rooftop PV
  • savings
  • tariffs


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