Demand Charges: Why a DC Charging Site’s Power Bill Surprises Owners

Short answer: on many commercial tariffs you pay twice — for energy (per kWh) and for your highest power peak in the month (per kW). Two fast chargers running together for 15 minutes can set that peak for the whole month. At low utilization the demand charge is spread over very few kWh, so the effective cost per kWh soars; RMI found demand charges can be up to around 90 % of a low-use DC site’s bill. Ask the utility for EV-friendly tariffs and design the site with load management before you build.

How a demand charge works

Bill component	Measured as	Example
Energy charge	kWh used in the month	12,000 kWh × energy price
Demand charge	Highest average power in any 15- or 30-minute interval in the month, in kW	300 kW × demand price
Fixed charges	Per month	Meter, connection, service

The demand charge does not care how often the peak happens. One busy afternoon sets it.

Why it hurts most at low utilization

Example values only — use your own tariff. Two 150 kW chargers, demand charge $15 per kW per month, energy $0.15 per kWh. When both run at once, the peak is about 300 kW, so the demand charge is about $4,500 a month — whatever the usage.

Energy sold per month	Demand charge per kWh	Energy per kWh	Effective cost per kWh
5,000 kWh	$0.90	$0.15	$1.05
10,000 kWh	$0.45	$0.15	$0.60
20,000 kWh	$0.225	$0.15	$0.38
40,000 kWh	$0.11	$0.15	$0.26

This is why new public DC sites can lose money on every kWh in their first year, even with a price that looks generous.

Six ways to reduce demand charges

Measure	How it works	Best for
1. Choose the right tariff	Some utilities offer EV-specific or low-load-factor tariffs with reduced or phased-in demand charges, or time-of-use energy prices instead	Every site — ask before you design
2. Site power limit	Load management caps the total power; chargers share it	Sites where full simultaneous power is rarely needed
3. Dual-connector sharing	Two cars share one cabinet’s power instead of two cabinets adding up	Public sites
4. Smart scheduling	Fleet vehicles charge in sequence or off-peak	Depots with predictable schedules
5. Battery buffer	A battery supplies peaks and recharges slowly	High demand charges, weak grid connections
6. Solar	Reduces daytime energy; reduces demand only if it reliably covers the peak	Sites with daytime peaks and roof or canopy space

The trade-off with a power limit

A site limit means that at the busiest moments some drivers charge slower. Set it with data: how often do both chargers run at full power, and what would a lower peak save? For many low-use public sites, a limit around 60–70 % of the installed power costs drivers little and saves a large share of the demand charge.

Questions to ask your utility

1. Which tariffs are available for EV charging? Are demand charges reduced or phased in?
2. Over what interval is demand measured (15 or 30 minutes)?
3. Is there a ratchet — does a peak keep affecting the bill for months afterwards?
4. Are there time-of-use periods for energy?
5. Can the site use a separate meter for charging?

Designing for it

• Put load management in the electrical design from the start.
• Choose chargers that accept remote power limits over OCPP.
• Prefer dual-connector DC cabinets that share power.
• Leave space and ducts for a future battery if the tariff may change.

VULTAE DC chargers support dynamic power sharing between their two connectors and remote power limits via OCPP 1.6J / 2.0.1, and our DC wallboxes (20–60 kW) suit fleet depots where charging can be spread over hours. For the full cost picture, see what goes into the cost of an EV charging station.