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:
| Plan | Demand Charge | Export Credit | Best For |
|---|---|---|---|
| E-27 | $9.16/kW on-peak | $0.028/kWh | Most solar customers (lowest total cost) |
| E-28 | TOU + demand | Varies by period | Shifted evening usage patterns |
| E-16 | TOU + demand | Varies by period | Solar + battery (designed for storage) |
Real E-27 Bills: What SRP Customers Actually Pay
Most online solar calculators use average SRP rates. We sourced actual 2025 billing data from Arizona homeowners to show what E-27 really costs — and why it beats every other SRP plan.
Household Profile: No Solar Baseline
2-story home, 1,989 sq ft, all-electric (no gas), heat pump water heater. On E-27 since 2020. Uses 17,101 kWh/year. Keeps demand between 2.1-4.8 kW by staggering appliances during peak hours.
"I take a cold shower at 5:45 PM and my water heater knows to switch to heat pump mode during peak. My neighbors think I'm crazy, but my E-27 bill is half theirs."— SRP customer, r/phoenix (2025)
| Month | E-27 | Basic | TOU (E-26) | Daytime Saver |
|---|---|---|---|---|
| January | $107 | $130 | $136 | $152 |
| April | $82 | $100 | $103 | $127 |
| July | $242 | $328 | $320 | $395 |
| August | $278 | $371 | $357 | $433 |
| October | $138 | $180 | $178 | $213 |
| Year Total | $1,728 | $2,325 | $2,289 | $2,679 |
Source: Actual SRP bills, same household, same 2025 usage data applied to all plans via SRP's comparison tool.
Solar + Battery Customer on E-27
A second homeowner with solar, battery, and EV on E-27 reports winter demand around 3 kW ($15 demand charge) and summer peaks up to 7.5 kW ($100 demand charge). Using SRP's own comparison tool, their results: E-27: $171/mo vs E-15: $179 vs E-28: $340 vs E-16: $387.
Why E-28 and E-16 Cost More
Despite being marketed as "solar-specific" plans, E-28 and E-16 cost nearly 2x more than E-27 for real solar customers. The higher per-kWh rates and restructured demand windows eliminate the savings they promise. Always run SRP's comparison tool with your actual usage before switching plans.
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
- • 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: Run pool pump, dishwasher, and laundry before 2 PM or after 8 PM in summer. Use timers to automate.
- Pre-cool before peak: Cool the house by 1 PM (while solar produces), then let temperature drift up during 2-8 PM peak.
- Use a smart thermostat: Ecobee and Nest can be programmed for SRP's TOU schedule and integrate with battery systems.
- Get SRP's $250 battery rebate: Check SRP's website for current eligibility and apply through your installer.
- Size your system for daytime usage: With SRP's low export rate ($0.028/kWh), oversizing wastes money. Match production to consumption and add a battery.
- Switch your water heater to heat pump mode during peak: One SRP customer cut demand by 1-2 kW just by scheduling their Rheem heat pump water heater to avoid resistance heating during on-peak hours.
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)
- SRP rate plan comparison data from Arizona homeowners (reddit.com/r/phoenix, 2025)