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Peak Shaving

Peak Shaving is the dispatch of an on-site battery energy storage system or behind-the-meter solar-plus-storage plant during short intervals of maximum facility electrical load to cap peak kilowatt or megavolt-ampere demand drawn from the utility grid, reducing monthly capacity demand charges and avoiding costly upstream transformer or feeder upgrades.

How it is measured and specified

Commercial and industrial (C&I) utility tariffs typically bill large electricity users on two separate meters: volumetric energy consumption (measured in kilowatt-hours, kWh) and peak power demand (measured in kilowatts, kW, or kilovolt-amperes, kVA, averaged over a 15-minute or 30-minute billing interval). A single 15-minute spike caused by chiller startup, bottling lines, or harbor crane lifting can set the billing peak for the entire month or trigger a full-year capacity ratchet.

To shave a facility peak reliably, an energy storage system must be specified across two independent engineering axes: power conversion system (PCS) kilowatt rating (which determines the maximum height of the load spike the battery can clip) and usable energy storage duration in kilowatt-hours (which determines how many consecutive hours the system can hold the grid import below the target demand threshold without exhausting its depth of discharge).

How it matters when sourcing from China

When C&I buyers import Chinese LFP storage cabinets or containerized BESS—such as CATL EnerC, Sungrow PowerStack ST500CP, BYD Cube Pro, or Hanchu ESS outdoor cabinets—sizing the PCS-to-battery ratio (C-rate) around the site's actual load profile is critical. If the plateau of the facility's peak load lasts four hours but the buyer imports a 2-hour (0.5C) cabinet, the battery will deplete mid-window and fail to prevent the monthly demand charge. As highlighted in how battery and storage TCO is modelled, the site duty cycle governs both revenue capture and ten-year degradation.

Across Tradvolt's commercial storage studies, peak shaving frequently delivers the largest share of annual cash savings or stacks alongside time-of-use (TOU) arbitrage:

What to confirm before procurement