When Energy Efficiency doesn't save you money

High Demand Factor

A facility implemented two commonly used energy reduction projects, lighting and HAVC with disappointing results. The bulk of energy costs were due to peak charges or high demand factor.

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A facility implemented two commonly use energy reduction projects, lighting and HVAC with disappointing results. Although the projected energy reduction goal was achieved, the reduction in energy cost was negligible. The load-use profile for the facility was determined using intelligent monitoring and demand factor (Dmax/Dave) was calculated to be 6.5. With high Dmax, only a relatively small amount of the total energy cost is derived from actual energy consumption. The bulk of energy costs were due to peak demand charges.


Energy managers should be putting effort towards implementing load management strategies such as load shifting and shedding. Demand factors are also often indicators of significant opportunity to implement response programs successfully. As Dmax goes up, energy use plays a decreasing role in energy costs.

Maximize load management when demand factor is 3.0 or higher.

Energy managers of facilities with a high demand factor

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