If you own or manage a business in Arizona, you’ve probably noticed this line on your utility bill: “Demand Charge.”

And if you’re like many business owners, that charge may be one of the biggest—and least understood—costs on your monthly statement.

Here’s the reality:

✅ Demand charges can make up 30% to 50% of your total electric bill.
✅ They’re calculated based on your single highest “spike” in usage each month.
✅ They’re costing Arizona businesses thousands of dollars every year.

The good news? Solar + battery storage can help you beat these charges—saving serious money while improving your energy resilience.

At Sun Energy Today, we’ve helped Arizona companies in every industry reduce demand charges and build smarter energy strategies. Let’s take a closer look at how it works.

What Are Demand Charges?

Understanding the Utility Game

Arizona utilities, such as APS and SRP, charge commercial customers for the following services:

  1. Energy used (kWh)—total electricity consumed over the billing period.

  2. Peak demand (kW)—your single highest 15- or 30-minute spike in usage during the month.

It’s the second part—peak demand—that really stings.

Even if your overall energy use is low, a single afternoon of high AC use or equipment startup can trigger massive demand fees that haunt your bill all month.

Why Arizona?

In a state with extreme summer heat, demand charges are especially punishing:

  • Businesses must cool their large spaces during afternoons when temperatures exceed 110°.

  • AC compressors, refrigeration units, and industrial equipment kick on at the same time.

  • Demand peaks happen just when utility rates are highest.

How Solar Helps Offset Demand

Peak Solar = Peak Usage

Here’s the good news:

  • Arizona gets abundant, intense sunshine during the hottest, highest-demand hours.

  • A well-designed solar system generates maximum output right when your building is using the most electricity.

This alignment helps offset demand naturally—reducing the size of those costly spikes.

How Battery Storage Maximizes Savings

Flatten the Curve

Solar alone can’t eliminate all demand charges—clouds, sudden load changes, or evening peaks can still cause spikes.

That’s where battery storage comes in:

  • Batteries charge during the day (when solar overproduces or rates are low).

  • They discharge strategically when demand is about to spike.

  • They flatten your load profile—reducing the “peak” that utilities use to calculate demand fees.

Automated Savings

Modern batteries work with smart energy management software that:

  • Predicts peak periods

  • Discharges proactively

  • Minimizes human intervention

  • Delivers consistent savings month after month

Case Study: Arizona Business Savings

One of our recent clients, a warehouse and logistics center in Phoenix:

  • Installed 220 kW of rooftop solar + 100 kWh of storage

  • Reduced demand charges by 42%

  • Saved over $3,200 per month on their electric bill

  • Achieved full project payback in under 5 years—with tax credits and depreciation

Other Sectors Seeing Big Wins

We’re seeing strong ROI for:

  • Manufacturers

  • Cold storage & food services

  • Hotels & hospitality

  • Large office buildings

  • Medical & healthcare facilities

If your business has big daytime loads—or pays TOU rates—solar + storage can help.

Extra Incentives for 2025

Maximize Financial Returns

Right now:

  • You can claim a 30% federal tax credit on solar AND battery systems.

  • You can depreciate assets under MACRS.

  • Utility rebate programs for storage are emerging.

Combined, these incentives make 2025 a “sweet spot” for beating demand charges.

Why Act Now?

H3: Timeline Matters

To lock in 2025 savings, your system must be:

  • Designed

  • Permitted

  • Installed

  • Interconnected

In Arizona, it can take 3–6 months. Starting today ensures you maximize this year’s benefits.

How Sun Energy Today Helps

We deliver:

  • Expert analysis of your demand profile

  • Custom solar + storage designs for your facility

  • Detailed ROI modeling

  • Financing and PPA options

  • Professional installation

  • Ongoing monitoring and optimization

Conclusion: Stop Letting Demand Charges Drain Your Profits

If demand fees are eating your energy budget, you can do something about it.

Contact Sun Energy Today for your free commercial energy assessment—and let’s design a system that saves your business thousands.