# Peak shaving with commercial battery storage

Peak shaving uses a battery to supply part of your electricity demand during short periods of high use, so you draw less from the grid at your busiest moments. This lowers the peak demand your bill is based on, reducing capacity and demand-related charges that are set by your highest usage.

## What peak shaving is

Many commercial electricity bills are not just about total energy used. They also include charges tied to your highest demand: the single busiest half-hour or your agreed peak capacity. A short spike, such as several machines starting together, can set a charge you then pay against for months. Peak shaving flattens those spikes.

A battery charged in advance discharges during the spike, supplying part of the load so the meter never records the full peak from the grid. The building runs normally; the difference is where the power comes from during those critical minutes.

## How batteries cut demand charges

Business tariffs commonly include capacity charges (based on the maximum supply you reserve) and demand or availability charges linked to your measured peak. By shaving the peaks, a battery can let you lower your agreed capacity and reduce demand-based charges, which are billed regardless of how much total energy you consume.

There are also time-of-use elements on many tariffs, where the unit rate is higher at certain hours. A battery can shift consumption away from those expensive windows by discharging then and recharging when power is cheaper or when your solar is generating. The exact saving depends on your tariff structure, so model it against your actual half-hourly data.

## Where peak shaving works best

Peak shaving suits businesses with spiky demand: manufacturing with heavy start-up loads, cold storage, workshops, or sites running large intermittent equipment. The more pronounced and predictable your peaks, the more a battery can trim. Flat, steady consumption offers less to shave.

Pairing the battery with solar strengthens the case, because the panels can recharge it during the day ready for the next peak. Under a PPA or lease the battery can be funded alongside the solar with no upfront cost, and you pay for the generation while the funding partner owns the equipment. Whether the numbers work depends on your load profile and tariff.

## Frequently asked questions

**Is peak shaving the same as going off-grid?**

No. Peak shaving keeps you grid-connected and simply reduces how much you draw at your busiest moments. Going off-grid means disconnecting entirely, which needs far more storage and is rarely practical or economic for a commercial site.

**How do I know if peak shaving will save my business money?**

It depends on your tariff and how spiky your demand is. Reviewing your half-hourly consumption data and bill structure shows whether capacity and demand charges are large enough for a battery to make a worthwhile dent.

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Source: [Peak shaving with commercial battery storage](https://ppafunding.com/guides/peak-shaving-with-commercial-battery-storage) · Author: PPA Funding team · Updated: 2026-07-30

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