Read the tariff before sizing the battery
An energy charge is based on electricity consumed in kWh. A demand charge reflects a measure of power, often over specified intervals and windows. The contract may use a maximum, an average of peaks, seasonal rules or other conditions. Some commercial contracts use kVA rather than kW. Do not substitute a generic household tariff description for the business’s actual schedule.
Bring that schedule and interval data to a commercial battery assessment. The question is not simply how many kWh the battery stores. It is whether it can reduce the quantity the tariff actually bills, at the right time, repeatedly enough to matter.
A hypothetical power-and-duration test
Suppose a simplified tariff bills the highest half-hour average demand in a stated window. A site would otherwise draw a steady 80 kW for one half-hour, and the aim is to limit that period to 60 kW. The battery must deliver 20 kW throughout the period: 20 kW × 0.5 hours = 10 kWh delivered. This ignores losses and reserve and is not an equipment recommendation.
| Battery constraint | Result |
|---|---|
| Only 10 kW discharge capability | Cannot achieve a 20 kW reduction even with ample energy |
| 20 kW capability but only 5 kWh available | Cannot sustain the reduction for the full half-hour |
| 20 kW and 10 kWh delivered | Meets this one idealised interval, not necessarily the full tariff period |
| A later unmitigated 80 kW interval | May still set the same billed maximum under the assumed tariff |
Do not generalise one successful interval
A business may have several peaks, consecutive high-load periods or a peak lasting much longer than expected. Recharge opportunities and operating reserves constrain the next response. A simulation should cover the whole billing rule and data period, including difficult days. A smooth daily average hides exactly the events that can determine demand charges.
Coordinate charging and competing objectives
Charging from the grid can create or increase demand if it occurs at the wrong time. Solar may not be available before every peak, and backup reserve can reduce dispatchable energy. A controller optimising energy prices may not also minimise billed demand unless that objective is explicitly included. Ask how conflicts between peak shaving, backup and other control programs are handled.
The commercial load-profile guide explains data quality and time matching. For units and reserve, use battery capacity versus power. If charging vehicles changes the peak, assess the depot duty-cycle worksheet before treating historical demand as the future load.
Request these assessment outputs
- Exact tariff version, demand units, interval length, windows and billing rule.
- Baseline and modelled demand traces, including the largest remaining peaks.
- Battery power, usable energy, efficiency, reserve and availability assumptions.
- Charging strategy and whether it causes a new demand maximum.
- Sensitivity to operating changes, outages, degradation and contract changes.
The financial case also needs equipment and operating costs, but this guide does not supply prices or returns. Keep the assumptions with the project planning table and consider the related commercial solar service where daytime generation is part of the proposal.
Sources and scope
Source check: 5 October 2026. General educational information, not an electrical design or a site assessment. Product instructions, local rules and contract terms must be checked for your circumstances.
- AER Energy Made Easy — Which type of tariff is right for you?
Demand versus energy; differing demand calculations, seasons and tariff windows.
Scope: Australian retail electricity guidance; plan availability varies. Source date: 2024-06-19.
- Australian Government — How solar pays for itself and batteries reduce bills
Self-consumption, peak demand, VPP operator control and possible reserve, lifetime and warranty impacts.
Scope: Australia. Source date: No publication date displayed.
- Australian Government — Batteries
Usable capacity versus power; AC/DC coupling; backup requires configuration; site restrictions; warranty and management questions.
Scope: Australia. Source date: Includes program information commencing 1 July 2025; page date not displayed.
Discuss your project or system
Share your goals and the information you have collected. Ask what assessment is appropriate for your circumstances.