Understanding demand charges and peak shaving
Energy charges and demand charges are two different things
An energy charge bills every kWh you use over a billing period. A demand charge is billed separately, based only on your single highest 15 to 30 minute spike in power draw, measured in kW rather than kWh. Reducing that one spike, even briefly, lowers the demand charge for the entire billing period, which is what peak shaving targets specifically. Business systems can claim different incentives, and the demand charge reduction estimator shows how those change the payback.
What a realistic savings number looks like
In one example, reducing an 8.5 kW peak by 35% at a $12 per kW monthly demand rate saved about $428 a year. That's meaningfully smaller in dollar terms than typical energy savings from the solar savings calculator, but it's a real add-on for accounts that carry a demand charge, particularly small commercial customers and some residential EV or TOU-D plans. For background on how solar power is generated, the solar explainer from the US Energy Information Administration is a solid starting point.
Why battery storage matters more here than for energy savings
Solar alone only shaves demand if your peak spike happens during daylight hours, which isn't guaranteed. A battery can discharge on demand regardless of timing, which is why serious peak shaving strategies almost always pair solar with storage. See the battery vs without battery comparison for how storage changes overall savings. The production figure behind this estimate comes from the annual kwh output estimator, which models output for your location and roof.
Checking whether you even have a demand charge
Most residential customers don't pay one. Check your bill for a line item labeled demand charge, capacity charge, or similar, or ask your utility directly. If you're on a standard residential rate plan, the time of use rate savings calculator is more likely to apply to your bill. The US Energy Information Administration's electricity data show how retail rates have moved, which is the starting point for any savings estimate.