2026 Briefing
Commercial Battery Storage
How commercial batteries cut demand charges: 15-minute peaks, peak shaving, TOU arbitrage, the Section 48E tax credit and real payback benchmarks.The hidden cost
You pay for your worst 15 minutes
Demand charges bill your highest 15- or 30-minute peak each month, often $15/kW or more. Source: NREL, 2017.The bill shock
Demand charges dominate
30–70% Share of some commercial bills that comes from demand charges alone. Source: NREL, 2017.One spike, one month
A 1.5 MW warehouse
Monthly peak 1,500 kW. Demand charge $20/kW. Demand bill $30,000/mo.Peak shaving
Batteries cap the peak
When load climbs, the battery discharges so the meter never sees the spike, cutting the demand charge.Energy arbitrage
Charge cheap, use at peak
Charge off-peak $0.10/kWh. Discharge on-peak $0.18/kWh. Spread $0.08/kWh.Efficiency matters
Losses eat the spread
Lithium-ion LFP ~90%. Vanadium flow ~65%. Thermal storage 35–60%.Section 48E credit
30% off the system
30% With prevailing wage rules, or below 1 MW. Otherwise the base is 6%. Source: IRS §48E; Plante Moran, Oct 2026.Bonus credits
Stack up to 50%
Base rate 30%. Energy community +10%. Domestic content +10%.The payoff
Real-world returns
Our default case 3.4-yr payback. Its 10-yr IRR 23.9%. Lazard CA C&I case 34% IRR.Your next step