How can businesses use EV batteries to cut energy costs?

Businesses can charge EV batteries during off-peak hours when electricity rates are low, then discharge that stored energy back into the building during peak pricing periods. This reduces demand charges and overall electricity bills. The practice is enabled by vehicle-to-building (V2B) or vehicle-to-grid (V2G) capable chargers and EVs.

What is a demand charge and why does it matter for businesses?

A demand charge is a fee utilities assess based on a business's highest power draw during a billing period, often measured in 15-minute intervals. These charges can represent a significant portion of a commercial electricity bill. By discharging EV batteries during peak demand moments, businesses can flatten their load profile and reduce this charge.

Do businesses need a large EV fleet to benefit from this strategy?

Even a modest fleet of V2G- or V2B-capable EVs can provide meaningful energy storage capacity for peak shaving. The benefit scales with fleet size, but small and mid-sized fleets can still see measurable reductions in peak demand charges. The key requirement is having compatible vehicles and bidirectional charging hardware.

Cost Savings in Energy Management: Business...

Cost Savings in Energy Management: Businesses Can Leverage EV Battery Storage to Optimize Energy Use and Reduce Peak Charges

Businesses can reduce energy expenditures by using EV batteries as distributed storage, drawing on stored power during peak pricing periods to avoid demand charges. This vehicle-to-grid or vehicle-to-building strategy turns EV fleets into active energy management assets. The approach offers a practical path to cost optimization without requiring large dedicated battery infrastructure.

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By Dave Tuttle · May 5, 2024, 9:49 PM UTCDr. Dave TuttleEnergy IndustryExperts TalkUniversity of Texas at Austin

Key takeaways

EV batteries can be discharged strategically during peak pricing windows to lower demand charges

Vehicle-to-building (V2B) and vehicle-to-grid (V2G) technology enables businesses to use EV fleets as on-site energy storage

This strategy reduces reliance on expensive grid power at peak times without separate battery storage investment

In an era where environmental sustainability aligns with economic incentives, commercial entities are increasingly turning to electric vehicle charging and battery storage solutions. This shift is not merely about adopting greener technologies but is also driven by the potential for substantial cost savings in energy management. As companies grapple with the complexities of energy costs and demand charges, the role of battery storage systems in commercial settings is gaining significant attention. This interest is magnified by the rising energy prices and the growing need for operational efficiency across industries.

The question arises: How can EV battery storage systems not only support environmental goals but also significantly reduce energy costs for businesses? This fundamental question lies at the heart of today’s analysis.

How can EV battery storage systems not only support environmental goals but also significantly reduce energy costs for businesses?

In the latest Experts Talk roundtable, Dr. Dave Tuttle, a Research Associate at the Energy Institute at the University of Texas at Austin, offers expert insights into how EV battery storage can transform energy management in commercial sectors. His analysis provides a detailed exploration of the economic impacts and operational efficiencies driven by these systems.

Key takeaways from Dr. Tuttle’s analysis include:

Demand Charge Reduction: By implementing battery storage, businesses can manage peak demand more efficiently, significantly lowering the demand charges that often constitute a large portion of commercial energy bills.
Cost Savings in Energy Management: These systems not only reduce the demand charges but also optimize overall energy consumption, leading to direct reductions in monthly energy expenditures.
Enhanced Power Quality Management: Battery storage systems help in regulating power quality by managing voltage and frequency, thereby protecting sensitive commercial equipment from power quality issues.
Diverse Application Potential: The flexibility of battery storage solutions allows them to be deployed in various commercial contexts, not limited to those businesses with EV charging stations.
Future-Proofing Energy Needs: As energy rates continue to fluctuate, having an integrated battery storage system can provide businesses with more predictability and control over their energy expenses.

Through his expert lens, Dr. Tuttle elucidates how embracing advanced battery storage technologies can provide substantial financial benefits and operational improvements to commercial enterprises, positioning them for a more sustainable and cost-effective future.

Embracing advanced battery storage technologies can provide substantial financial benefits and operational improvements to commercial enterprises, positioning them for a more sustainable and cost-effective future.

Video TranscriptExpand ↓

The EV storage system, and it doesn't have to be EV. It could be these battery packs that sit on a alongside of a building, have play a very formidable role in bringing down your overall cost of electricity for that enterprise, not just in in, demand response type applications, but also just the management of of the current where they can manage the voltage, the frequency, and the, apparent and reactive power in that system such that you protect the equipment that's in the facility. So there's additional benefits of where these battery packs can play a role in manufacturing. Absolutely. So in the commercial space for the grid, behind the meter demand charge management is one of those applications that Michael's alluding to that's very valuable. Sometimes I've talked to different commercial customers, and half their bill is the demand charge from the utility versus half of it being the energy. They that's different billing than our residential bills. Residential bills typically only have energy charges and maybe a meter charge. Commercial and industrial have demand charges as well as elect energy charges.