Most cultivators watch kilowatt-hours. Many commercial and industrial electric rates also bill a second number: peak demand in kilowatts. For a grow facility, where lights, compressors, dehumidifiers and reheat can all run at once, that second number can be a large share of the bill. This guide explains how demand billing typically works and where the HVACD system fits in. It is general information; your utility's tariff is what actually applies.
kW vs. kWh: two different things on one bill
| Energy (kWh) | Demand (kW) | |
|---|---|---|
| What it measures | Total electricity used over the month | Your highest rate of use, usually the highest average over a 15-minute interval |
| How it is billed | $ per kWh | $ per kW of billing demand, per month |
| What drives it | How long equipment runs | How much equipment runs at the same time |
An analogy: kWh is the miles you drive, kW is how hard you press the accelerator. Two rooms can use the same kWh in a month and get very different demand charges, because one of them stacks every load into the same 15 minutes.
How demand charges typically work
- 15-minute intervals. The meter averages your power draw over short intervals (15 minutes is common). The highest interval in the billing period sets billing demand. One bad interval can set the charge for the whole month.
- Time windows. Some tariffs bill part of demand only during on-peak hours. For example, Xcel Energy Colorado's Schedule SG Generation & Transmission demand charge is moving to the highest 15-minute demand during on-peak periods (weekdays 4 to 9 pm in summer, 5 to 9 pm in winter), while a distribution demand charge still applies. See the sources below.
- Ratchets. Some utilities use a demand ratchet: billing demand can be set at a percentage of the highest peak from a prior period (often the previous 11 or 12 months), so a single summer spike can raise bills for months. Whether a ratchet applies, and how, depends on your tariff. Check your rate schedule.
- Seasonal rates. Demand rates are often higher in summer, which is also when cooling loads are highest.
Why grow rooms set high peaks
A traditional room is often a stack of independent equipment: fixed-speed DX units, a row of standalone dehumidifiers and, in some rooms, electric resistance reheat. Each device has its own thermostat or humidistat, and nothing coordinates them. A fixed-speed compressor is either off or at full power, so when the room calls for cooling and moisture removal at the same time, everything can switch on together. That combined draw is exactly what the demand meter captures.
Standalone dehumidifiers add a second penalty. They reject their motor and compressor energy, plus the heat released when water condenses, into the room as heat. The cooling equipment then has to remove that heat too. (Quest's published data for its Dual 150, for example, lists 10,500 BTU/h of total heat output at a 1,300 W input.) Electric resistance reheat, used to keep a room from overcooling during dehumidification, converts power directly to heat at the same time compressors are running. More on the equipment-stack approach: integrated HVACD vs. mini-splits and dehumidifiers.
How an integrated, staged HVACD system can reduce peak and energy
- Staging and VFDs avoid all-on peaks. Multi-stage or variable-speed compressors and VFD-driven fans can ramp to match the load instead of jumping to 100%. Lower part-load operation and fewer simultaneous starts generally mean a lower highest 15-minute interval.
- One controller, one strategy. PLC controls coordinate cooling, dehumidification and reheat so equipment is not fighting itself (one unit cooling while another adds heat).
- Hot gas reheat instead of electric reheat. Hot gas reheat reuses heat the compressor has already produced to warm the dehumidified air, instead of adding electric resistance heat.
- Moisture removal on the main coil. When the integrated system handles the latent load, fewer standalone dehumidifiers are needed, and the heat they would add to the room is not there for the cooling system to remove. See grow room dehumidification.
How much any of this helps depends on the room. The calculator below lets you run your own numbers.
How much could your room save?
Answer a few questions about the setup you run now. We’ll do the rest.
Practical steps to lower your demand charge
- Read your tariff. Find your rate schedule, the demand interval, any on-peak window and whether a ratchet applies.
- Pull interval data. Many utilities provide 15-minute interval data. Look at when your monthly peak happens and what was running.
- Avoid simultaneous starts. Stagger lights-on between rooms and stage equipment rather than letting everything start together.
- Look at the equipment stack. Electric reheat and a large count of standalone dehumidifiers are worth reviewing. Our retrofit guide and cost guide cover the options.
- Size from the load. Oversized equipment can raise peak demand without improving control. See grow room HVAC sizing.
Why it matters beyond the bill
Growers running our systems report consistent VPD and temperatures and higher yields, even with less experienced staff.
Yield Logic designs custom integrated HVACD with cooling, dehumidification, modulating hot gas reheat and PLC controls in one system. We're part of Visions Contracting, a licensed General Contractor (Unlimited) and Electrical Contractor, and construction is done in-house. For the bigger picture, start with our cannabis grow room HVAC guide.
Getting started
Send us a sketch with basic room dimensions, plus a recent electric bill if you want us to look at demand. Layout help and basic sizing are free. Design consultation and engineering are paid services when you need them.
Call (303) 710-8616 Ext. 702 or email Info@VisionsContractingLLC.com.
FAQ
- What is a demand charge?
- A demand charge bills your highest rate of power use (kW), usually the highest average over a 15-minute interval in the billing month, separately from the total energy you use (kWh).
- Why do grow rooms get high demand charges?
- Lights, fixed-speed compressors, standalone dehumidifiers and electric reheat can all run at the same time. The meter records that combined peak, and the demand charge is billed on it.
- Will an integrated HVACD system lower my bill?
- It can reduce peak demand and energy compared with stacked fixed-speed equipment, but actual results depend on your room loads, climate, equipment, operation and tariff. Contact us for a sizing review.
Sources
- U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A, Average Price of Electricity to Ultimate Customers by End-Use Sector, by State: eia.gov
- Xcel Energy Colorado, Large Business Time of Use and Schedule SG demand charge update: co.my.xcelenergy.com
- Xcel Energy, Rate Books and Summary of Electric Rates (Colorado): xcelenergy.com
- RateGrid, Xcel Energy CO Schedule SG, Secondary General (transcription of PSCo COLO. PUC No. 8): rategrid.dev
- 10 CFR 431.97, Energy efficiency standards for commercial package air conditioning equipment: ecfr.gov
- Quest Dual 150 dehumidifier specification sheet (TS-880): questclimate.com and product page: questclimate.com
- Published equipment specifications for the 16-ton grow-room HVACD model used in the YL 15 (cooling capacity, sensible capacity, moisture removal, rated current, test conditions). Available on request.