What Is a Demand Charge?

A demand charge bills a site based on its highest power draw during a billing period, in kVA or kW, on top of the normal per-kWh energy charge. It's a separate cost from how much energy you use; it's about how hard you draw at your single worst moment.

Why It Catches Sites Off Guard

Total energy use and peak demand are different measurements. A site can use relatively little energy overall but still trigger a large demand charge if it draws heavily for even a short window, commonly the highest 30-minute average in the whole billing period. EV charging is a classic trigger: a handful of vehicles charging simultaneously can spike demand well above the site's typical baseline.

How UK Demand Charges Typically Work

Because the demand charge is set by a single peak, one avoidable spike can raise costs for the entire billing cycle, even if every other half-hour was well within capacity.

Neutron's Approach

Our Energy Storage Systems and dynamic load balancing work together to flatten the demand spikes that drive up this charge, particularly on sites where EV charging is the main source of peaky demand.

How is a demand charge calculated?

Most UK commercial tariffs measure the highest average demand (in kVA or kW) over a short window, often 30 minutes, at any point in the billing period, then charge a rate per kVA or kW on top of the normal per-kWh energy charge. One brief spike can set the charge for the whole period.

Does EV charging increase demand charges?

It can significantly, since EV charging adds large, concentrated power draws exactly when vehicles plug in. Without load balancing or battery support, a site can see its demand charge jump even if total energy use only rises modestly, because the charge is set by the peak, not the average.