How Commercial Solar + Battery Storage Reduces Peak Demand Charges in California
California businesses are getting hit with some of the highest electricity costs in the country, and it’s not because they’re using more power. It’s because of demand charges, the part of your bill that spikes when your facility hits a high electrical load at any moment during the month.
For most commercial and industrial facilities, demand charges can make up 30–70% of the total utility bill. And every year, those rates climb.
Solar helps, but solar alone can’t stop demand spikes. That’s where battery storage comes in. Commercial battery systems, often called BESS (Battery Energy Storage Systems), are now the most effective tool businesses have to control peak demand, lower operating costs, and bring stability back to their utility bills.
This article breaks down how it works, why it matters, and how Burge Energy helps businesses take control of their energy costs for the long haul.
What Peak Demand Charges Are and Why They Matter
Peak demand charges are extra fees utilities charge when your facility’s power use hits its highest point over a 15-minute window during the billing cycle. It doesn’t matter if it lasts five minutes; that short spike sets the cost for the entire month.
For commercial buildings, demand spikes happen during:
Equipment startup
HVAC peaks
Manufacturing loads
Fleet vehicle charging
Pumping and water movement
Unexpected surges in operations
When the grid sees a spike, you pay a premium. And in California, that premium is getting brutal.
Utilities design demand charges to manage grid stress, but the result is that businesses are punished for short bursts of activity, not overall energy use.
That’s why smart companies are shifting to solar + battery solutions because you can’t always change when energy is needed, but you can change where that energy comes from.
How This Impacts Commercial & Industrial Facilities
Most commercial facilities don’t realize their biggest energy pain point isn’t total consumption, it’s peak demand. Those spikes are unpredictable and expensive.
This affects:
Manufacturing facilities are starting multiple machines simultaneously
Cold storage & warehouses with compressors cycling on
Office buildings with HVAC demand swings
Hotels and hospitality with fluctuating occupancy loads
Retail shopping centers during high-traffic hours
Car dealerships using large lighting and EV chargers
Water agencies and agriculture operations are running pumps
Without a battery system to flatten load curves, facilities end up paying thousands, sometimes tens of thousands, every month for demand.
Solar reduces daytime energy costs, but batteries solve the hidden cost problem.
How Solar + Battery Storage Solves Peak Demand
A battery energy storage system (BESS) is designed to discharge instantly when your facility hits a load spike, preventing the utility from seeing it.
This process is called peak shaving, and it is the primary financial reason commercial clients invest in batteries.
Here’s how the combination works:
Solar produces clean, low-cost energy during the day.
Excess solar charges the battery instead of going back to the grid.
When your facility hits a large load spike:
The battery discharges instantly
Your meter avoids the high-demand reading
Your facility stays powered without pulling from the grid
Demand charges stay low all month long.
It’s simple:
Solar cuts energy costs. Batteries eliminate spikes. Together, they stabilize your entire bill.
Financial Benefits of Solar + Storage
Commercial solar and BESS work together to deliver long-term, predictable financial savings:
✔ Major Demand Charge Reduction
Most facilities see 20–50% drops in demand charges with a properly designed battery system.
✔ Lower Energy Consumption Costs
Solar offsets kWh usage, reducing the cost per unit of electricity.
✔ Protection Against Rate Increases
California utility rates increase every year, often sharply.
Solar + storage gives you control instead of accepting whatever the utility decides.
✔ Incentive Stacking
California programs and federal incentives can offset 30–60% of project costs.
✔ Strong ROI & Shorter Payback
Commercial clients commonly see paybacks between 3–6 years, depending on load profile and incentives.
California Incentives and Rebates
California offers some of the strongest incentive programs in the country:
State and Federal Incentives
30% Federal Investment Tax Credit (ITC)
Bonus ITC adders for certain commercial properties
Accelerated depreciation benefits
Local utility incentives (when available)
SGIP (Self-Generation Incentive Program)
SGIP is specifically designed for battery storage and often provides:
$150,000+ incentives for large commercial systems
Higher incentive tiers for critical facilities or load-serving programs
Many businesses don’t realize they qualify until a professional review is done.
Burge Energy manages the entire incentive process so you don’t leave money on the table.
Operational & Reliability Benefits
Beyond cost savings, solar + storage improves facility performance:
Backup power for critical loads
Protection against outages & grid instability
Better control over charging schedules
Optimized energy flow during high-stress periods
Cleaner, more efficient operations
For facilities relying on uptime manufacturing, cold storage, hotels, and car dealerships, a battery system becomes more than a cost-saving tool. It becomes a reliability asset.
Technical Considerations for Commercial Clients
When designing a commercial solar + storage system, the following must be analyzed:
Peak load profile
15-minute demand windows
Solar production patterns
Battery discharge duration
Required inverter capacity
Backup load strategy
Panel locations & roof capacity
Electrical infrastructure and main service limitations
Utility interconnection requirements
This is why a cookie-cutter approach does not work. Commercial systems must be engineered around your exact load behavior, not generic assumptions.
Burge Energy specializes in designing systems that are tailored, accurate, and built to perform.
Why Burge Energy Is the Right Partner
At Burge Energy, we focus on one thing: real solutions for real businesses.
We bring:
Deep experience in commercial solar and battery design
A full turnkey EPC approach (engineering, procurement, construction)
Honest evaluations, no inflated promises
Clear explanations and straightforward guidance
Strong project management and high-quality workmanship
A partner mindset that puts your business first
We understand Southern California energy challenges. We understand the rate structure. And we know how to engineer systems that actually solve the financial pain points you’re dealing with.
Peak demand charges are only getting worse in California. The businesses that take control now will be in the best position for the next decade. Commercial solar + battery storage is one of the strongest tools available to stabilize your energy costs, protect your operations, and create long-term financial resilience.
To explore Solar, Battery Storage, or EV Charging solutions for your facility, schedule a consultation with Burge Energy today.