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How do batteries interact with industrial TOU or demand-based tariffs?

Industrial electricity tariffs typically include two major components: Time-of-Use (TOU) energy charges – electricity costs vary throughout the day.

UpdatedJune 2026
Read time4 min read
CategoryCommercial Battery Storage
Reviewed byGI Engineering
Clear answer

Clear answer, explained.

Demand charges – based on the highest recorded kW demand during a billing cycle. A battery interacts with these tariffs in two ways: Load Shifting (TOU optimisation): Charges during low-rate periods or from onsite solar and discharges during high-rate periods. Peak Shaving (Demand reduction): Discharges during short high-load intervals to reduce the maximum billed kW. Advanced energy management systems monitor tariffs and facility load in real time to optimise discharge schedules automatically.


Key points

What this means in practice.

  • Charges during off-peak or low-rate periods
  • Discharges during peak-rate intervals
  • Reduces maximum billed kW demand
  • Improves
  • ROI in high-demand industrial tariffs
  • Works with or without onsite solar

When this applies

Best-fit environments.

  • Manufacturing and heavy industrial facilities
  • Sites with demand charge exposure
  • Facilities on
  • TOU or hybrid tariff structures

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