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A few months ago, Andrew Karhl, one of our Commercial Solar Consultants, heard from a company that invested in an extra production line to keep up with demand. Their team was excited until they saw the next electric bill. They’d crossed the threshold into a larger utility service rate category that carries a whopping $15,475 monthly fee just for staying connected to the grid. Over a year, that adds up to more than $185,000. And no, that’s not for the electricity itself; it’s just the service charge.
Here’s the core problem: once you move beyond certain usage limits, you’re labeled as “large general service,” which comes with a steep increase in monthly baseline charges. So, how can you bring that electricity usage back under the limit without sacrificing growth? Andrew says the best solution is to implement solar and battery storage systems.
If you’re curious why there’s a hefty fee for simply connecting to the grid, it’s because utilities invest in heavy-duty infrastructure – substations, lines, and workers – to deliver large amounts of power whenever needed. Whether you use that power daily or occasionally, the grid must be ready on demand. Some call this a “meter fee,” and it’s more than a few dollars to check your usage. It’s the utility’s way of recouping infrastructure costs for supporting big industrial or commercial electric loads.
Across the country, these charges vary by state and by utility. In Maine, a large commercial customer with Central Maine Power (CMP) will pay $13,527 each month just to maintain a connection to the grid. Versant’s large customers can expect $15,475 per month. Rates in other regions differ, but Maine has some of the highest service rates in the country.
Electric utilities generally group businesses into rate categories by their highest 15-minute demand for electricity during the billing cycle, which gets measured in kilowatts (kW). Kilowatt (kW) measures the power you draw at a single moment, while kilowatt-hour (kWh) measures energy over time.
Andrew uses a car to illustrate the difference between power (kW) and energy (kWh): "Energy is like the amount of fuel you put in the tank, while power is the horsepower needed at any instant – like when your car needs more power to maintain a speed of 55 mph while going up a steep hill. That’s what happens on the grid. The utility has to be ready for your facility’s “hill climb” no matter how brief.”
Residential customers mainly pay for total kWh used (plus a small fee to stay connected), but commercial users face an added “demand charge” based on the highest kW amount used during any 15 minutes each month.
With CMP, if your on-peak usage goes above 1,000 kW even once, you’re moved to the Large General Service rate for 12 months. With Versant, the threshold is 500 kW, and they’ll place you in the large rate category after you cross that limit twice within 12 months. Either way, once they classify you as a large customer, you’re charged those higher rates for the next 12 months, even if you operate at lower levels for the rest of the year.
Often, the culprit is a new machine that uses a lot of power in short bursts or a longer operating schedule that pushes usage up. New refrigeration systems, large HVAC equipment, or expansions that add multiple conveyor lines can push you past the threshold. Manufacturing plants, cold storage facilities, large farm operations, or even wastewater districts could see their demand rating jump above the threshold when growing their operations. The difference one kilowatt can make doesn’t sound like much, but it can mean an added $13,527 or more on each month’s bill if you cross that line.
Solar panels paired with a battery energy storage system (BESS) can prevent facilities from crossing those thresholds.
Solar panels generate electricity on-site. On a sunny day, your facility draws less power from the grid because the panels handle part of the load. This makes a dent in your average usage, potentially keeping your monthly power draw below that 500 or 1,000 kW level. However, solar alone likely won’t solve high short-term peaks. Kelly Kaufmann, ReVision Energy's Director of Energy Storage, says that’s where battery storage comes in:
"Batteries operating with a smart energy management system can learn from your facility’s load profile and discharge at times of high energy costs or imminent demand spikes, effectively shaving off those brief peaks. Smart software monitors usage in real-time and deploys stored power to keep demand below thresholds like 500 or 1,000 kW, helping you avoid the “large general service” status." She says the system can also be easily updated as your utility’s billing structure or facility needs change, locking in continued savings over time.
The cost of these batteries depends on how big your load spikes are and how long they last. If your business has short bursts that cause usage spikes, a well-designed BESS can protect you without needing a massive battery bank.
Instead of rearranging production schedules or limiting growth, a solar and battery system can free you to grow your business the way you want. Connect with our team at ReVision Energy, and we’ll design a setup that keeps your electric bills manageable, your company growing, and your energy cleaner for the future. You can email us your inquiry at hello@revisionenergy.com or fill out the form on the page linked below.
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