When to use: Turning a facility's annual kWh consumption and peak kW demand into the two figures that drive solar-plus-storage sizing — average load, load factor (how "flat" vs. "peaky" the facility's usage is), and the annual demand-charge exposure that battery storage can target.
Commercial solar-plus-storage sizing starts with two numbers pulled from a facility's utility interval data: annual energy consumption (kWh) and peak demand (kW). This calculator derives average load and load factor from those two figures, estimates annual demand-charge exposure, and characterizes whether the facility's usage pattern is a good fit for solar-only offset or benefits more from battery-based peak shaving.
Residential solar sizing is usually driven by annual kWh consumption alone. Commercial and industrial rate structures typically add a demand charge — a separate fee based on the highest 15-minute average kW draw during a billing period, independent of total energy used. A facility with a low, flat load can have a much smaller bill than one with the same annual kWh but sharp demand spikes, because the demand charge is billed on the peak alone. That is why commercial solar-plus-storage projects size against both figures, not just annual usage.
Load factor is the ratio of average load to peak load, expressed as a percentage: a facility running at a constant kW draw 24/7 has a load factor near 100%, while a facility with a low, mostly-idle baseline and occasional sharp equipment-driven peaks has a low load factor. A high load factor (60%+) means the facility already uses power efficiently relative to its peak — solar offsets a large share of that steady baseline. A low load factor (under 35%) means peak demand charges dominate the bill relative to energy cost, and battery storage aimed specifically at shaving that peak often pays back faster than simply adding more solar capacity.
The annual kWh and peak kW figures derived here feed directly into the next steps of a solar-plus-storage design: annual energy consumption anchors PV array sizing (how much of that annual load solar should offset), while peak demand and load factor anchor battery sizing — a battery aimed at demand-charge reduction is sized to shave the gap between peak and a target reduced peak, not to store a fixed number of backup hours the way a resiliency-focused battery would be.
There is no universal "good" number — it depends on the facility type. Continuous-operation facilities (24/7 manufacturing, cold storage) often have load factors of 60-80%+. Facilities with intermittent equipment use (retail, warehouses with occasional forklift charging or dock-door equipment) often run 25-45%. Lower load factors indicate more demand-charge savings opportunity from battery peak-shaving.
Both are on 12 months of utility bills, or in interval data (typically 15-minute intervals) available from the utility's online portal or a request to the account rep. Peak demand is usually listed on each bill as the billing-period maximum demand; annual kWh is the sum of 12 months of usage.
Only if the utility rate structure includes a demand charge — not all rate schedules do, particularly smaller commercial accounts on flat energy-only rates. Check the specific rate schedule; demand-charge-based savings only apply where a $/kW charge exists.
Try our Renewable Energy Studio
More calculators, simulators, and guides for this discipline.