Load Factor: Why Two Businesses with the Same Usage Pay Different Bills
Load factor is the single most useful number for understanding your commercial energy cost — and most operators have never calculated it.
Load factor is the ratio of your average power use to your peak power use over a period. Express it as a percentage: a facility averaging 60 kW with a 100 kW peak has a 60% load factor.
Why it matters
A high load factor means you use the grid steadily — you're an efficient, predictable customer, so you pay less per unit and less relative demand charge. A low load factor means big spikes over a low baseline, which is expensive because you pay for capacity you rarely use.
How to improve it
- Flatten peaks by staggering equipment start-up.
- Shift flexible loads away from your busiest window.
- Run continuous processes at a steady rate where possible.
- Add storage or on-site generation to shave peaks (for large sites).
Improving load factor lowers both your demand charges and, often, the commodity rate a retailer will offer you.
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Stop overpaying on a spend this big.
Call 1-587-990-5529 or get my custom quote — a specialist will price your load.