If you're an SRP customer considering solar, demand charges are the single most important concept to understand. They can make or break your solar savings — and they're the #1 reason SRP solar math is different from APS.
What Are Demand Charges?
A demand charge is a fee based on your peak electricity draw in a single hour during on-peak times each billing cycle. It doesn't matter if you only hit that peak for one hour — you pay the demand charge for the entire month based on that single highest hour.
Think of it like a highway toll that's based on the widest truck you ever sent through, not the total traffic. SRP charges $9.16 per kW of on-peak demand.
Demand Charge Example
Your AC, pool pump, and dryer all run at 5 PM on a Tuesday in July. Together they pull 10 kW from the grid for that hour. Even if you barely use electricity the rest of the month, your demand charge is:
10 kW × $9.16 = $91.60 demand charge
This is on top of your regular per-kWh usage charges and basic service fee.
How SRP Calculates Your Demand
SRP measures your demand during on-peak hours only. The peak windows depend on the season:
| Season | Months | On-Peak Hours | Solar Producing? |
|---|---|---|---|
| Summer | May - October | 2 PM - 8 PM weekdays | Yes (2-6 PM), fading by 7-8 PM |
| Winter | Nov - April | 5-9 AM & 5-9 PM weekdays | No (morning is dark, evening is after sunset) |
The Solar Gap Problem
Solar helps reduce summer demand charges (panels produce during the 2-6 PM window) but does almost nothing for winter demand charges (peak hours are before sunrise and after sunset). This means solar alone can't eliminate demand charges entirely.
SRP Rate Plans for Solar Customers
SRP requires solar customers to be on a demand-based plan. Here are your options:
E-27 — Standard Solar Plan
- • Demand charge: $9.16/kW on-peak
- • Export credit: $0.028/kWh
- • Basic service: $20.00/month
- • Most common plan for existing solar customers
E-28 — Newer TOU Solar Plan
- • Different time-of-use windows than E-27
- • May shift on-peak to later evening hours
- • Can benefit some homes depending on usage patterns
- • Worth comparing to E-27 with your specific usage data
E-16 — Battery-Paired Plan
- • Designed for solar + battery customers
- • Incentivizes demand management with battery discharge
- • Can significantly reduce effective demand charges
- • Best option if you're adding battery storage
How Solar Reduces (or Doesn't Reduce) Demand Charges
Solar panels reduce your demand from the grid whenever the sun is shining. If your panels produce 8 kW and your home is using 10 kW, you only pull 2 kW from SRP — your measured demand is 2 kW, not 10 kW.
The problem: demand charges are set by your single highest hour. One cloudy afternoon, one late-evening AC blast after sunset, one winter morning heating cycle — any of these can spike your demand and set your charge for the entire month.
| Scenario | Grid Demand | Demand Charge |
|---|---|---|
| No solar, AC running at peak | 12 kW | $109.92 |
| Solar producing, sunny afternoon | 3 kW | $27.48 |
| Solar, but after sunset (7:30 PM) | 12 kW | $109.92 (no help) |
| Solar + battery, evening peak | 1 kW | $9.16 |
Battery Storage: The Demand Charge Solution
A home battery (like Tesla Powerwall or Enphase IQ Battery) stores excess solar production and discharges it during peak hours when the sun isn't shining. This covers the "solar gap" — the hours after sunset when SRP is still charging demand rates. See our battery storage guide for costs and sizing.
With a properly sized battery, most SRP customers can keep their demand below 2-3 kW even during peak hours, reducing the demand charge from $80-$110/month to $18-$27/month.
Battery Savings on SRP E-27
- • Typical demand charge without battery: $80-$110/month
- • Typical demand charge with battery: $18-$27/month
- • Monthly savings: $50-$90 from demand charge reduction alone
- • Battery still qualifies for 30% federal tax credit in 2026
- • SRP offers $250 rebate per battery (while funds last)
Tips to Minimize SRP Demand Charges
Shift heavy loads to off-peak hours
Run your pool pump, dishwasher, and laundry before 2 PM or after 8 PM in summer. Use timers to automate this.
Pre-cool your home before peak
Set your thermostat to cool the house by 1 PM (while solar is producing), then let the temperature drift up slightly during 2-8 PM peak.
Use a smart thermostat
Ecobee and Nest can be programmed for SRP's TOU schedule. Some integrate with battery systems for automatic demand management.
Get SRP's $250 battery rebate
SRP offers a $250 rebate for qualifying battery installations. Check SRP's website for current eligibility and apply through your installer.
Size your system to match daytime usage
With SRP's low export rate ($0.028/kWh), oversizing your solar system wastes money. Match production to your daytime consumption and add a battery for the rest.
Bottom Line
SRP demand charges add a layer of complexity to the solar equation, but they don't make solar a bad investment. Solar alone still reduces your overall bill — just not as dramatically as on APS. Adding battery storage turns SRP from a challenging solar utility into one where you can nearly zero out your electric bill.
Use our calculator to see how demand charges affect your specific savings estimate — try the Gilbert solar calculator or the Queen Creek solar calculator to see SRP-specific results. For a broader rate comparison, see our APS vs SRP rate guide.
Sources
- SRP Electric Rate Schedule E-27 — Customer Generation (srpnet.com)
- SRP Rate Schedules E-28, E-16 (srpnet.com)
- SRP Solar FAQ — How solar billing works (srpnet.com)
- SRP Battery Storage Rebate Program (srpnet.com)