Peak Shaving with Power Shifting and Load Shedding: An Overview

No, they are not new product lines from Gillette® and Weight Watchers®. Peak Shaving and Load Shedding are power management strategies that can help optimize your grid tied solar system. Elon Musk recently talked about peak shaving in his PowerWall battery announcement, so we figured we’d elaborate on what he was talking about. See our blog about his announcement here.

Some power companies (POCO) charge an extra fee for high power usage customers. This is often called a demand charge or demand penalty. Demand is calculated across a short time frame (often 15 minutes) during which overall usage is tracked and averaged. If the demand is based on a high usage period, for example, while you are running an electric dryer, your demand penalty may be artificially high. Peak shaving is the ability to control your usage from the grid during intervals of high demand in order to limit or reduce demand penalties for the billing period. This can be accomplished with a few techniques, even without a battery bank.

Time of Use (TOU) charges are where the electric company charges you more for electricity bought during peak hours, usually during the day. Some POCOs are making TOU mandatory, some are optional. Most homes use very little power during the day when your solar system is making the most power, since the family is at work or school, and use most of their power in the early morning and evening. Tesla’s solution was to store the solar power in your battery bank, and use that stored solar power before you buy any power from the grid. The TOU charges in most of the USA are not high enough to justify the added expense of adding a battery that will be cycled every day.

However, some solar net metering agreements, the contract between you and your POCO, aren’t the most solar friendly arrangements. Since your solar system probably makes more power in the summer than in the winter, most people take advantage of the ability to sell more power back in the summer for credits, that can then be used in the winter when your system isn’t generating as much. But some net metering agreements are limiting the amount of credits you can carry over. Some are even restricting it to the end of each month. Others, although currently only a few, are paying avoided costs, or wholesale pricing for extra solar power sent back to them, which is a fraction of what you pay for the power that you then buy back.

Power Shifting maximizes the solar power usage as it is being generated. Simply put, use your solar power immediately instead of selling or storing it. If your washing machine or dishwasher has a delay feature, why not have them turn on, one at a time, during the mid day when you are making the maximum power? This way, the dishwasher can use the solar power from 11-12, and the washing machine can use it from 12 -1. Your power usage gets taken care of directly from the solar, and the power company never sees the increase in your load. This is also very useful in off grid solar systems, maximizing what is used immediately, rather than cycling your battery bank, as well as making sure you don’t overload your inverter by spreading out your high power needs. A simple form of power shifting can be accomplished with a timer; setting the freezer to not come on during certain times of the day, using a programmable thermostat in lightly used rooms, etc.

Power shifting when you have TOU rates, but no solar, would make more sense the opposite way, shifting your loads to the middle of the night when rates are lowest, and using as little as possible midday with the highest pricing.

Load shedding can be a little more complicated. With load shedding, loads are prioritized, and if the total load starts getting high, a lower priority load, such as an air conditioner or a freezer can be temporarily shut down for 10 minutes to reduce the total load, or the electric water heater could be turned off for an hour. Power management tools are available for commercial applications, it is not used much in residential systems.

Most residential grid tied systems in the USA currently don’t have to deal with Peak Shaving, but based on your rates and your net metering agreement, as well as the setup of your solar system, Load Shifting may make sense for you. This can be accomplished even without batteries – just make sure your daytime loads don’t exceed your power generation.

About Author

Amy Beaudet
Amy Beaudet was in the solar industry at the altE Store from 2007 until her untimely passing in 2021. She was a sales rep, instructor, and an all-around solar evangelist, sharing her passion for solar around the world. When whe wasn't at work, she enjoyed sailing and skiing - but odds were good she was still talking about solar on the boat or on the slopes. See more of Amy Beaudet's blog posts.