Why solar didn't fix your demand charge

Two different products solving two different problems

Solar panels and batteries are kilowatt-hour products. They reduce how much energy you buy from the utility across the month. That is a real and valuable thing to do, and for customers on a straight energy-only rate it can be most of the bill.

A demand controller is a kilowatt product. It reduces the highest rate at which you pulled power at any single moment during the billing period. That is a different number, calculated a different way, on a different line of your bill.

If your rate has both charges, you need both products. Solar alone leaves the demand charge largely intact, and a lot of solar customers do not discover this until the first summer bill arrives and the savings are half what they expected.

This is the most common call we get from solar owners, and it is worth walking through honestly.

Why solar does so little for one bad interval

Your demand charge is not set by your average solar production. It is set by the worst single interval of the month, when your consumption was highest and your production happened to be lowest at the same time.

Three things create those gaps, and all three land during the hours when peaks get set.

Monsoon cloud cover. In Arizona, July through September brings afternoon storm buildup almost daily. A dense cloud deck can cut array output by 70 to 90 percent within a couple of minutes. It happens in mid-afternoon, when the house is hottest and every air conditioner is running. Your production collapses and your consumption does not. That interval is your peak.

Panel soiling. Dust accumulation between rain events reduces output measurably. In the desert Southwest the decline between cleanings is meaningful, and most homeowners never clean their panels at all. It is a slow, invisible derate that shows up in exactly the intervals where you had the least margin.

Inverter faults and derating. Inverters trip on grid voltage excursions, on frequency, on high ambient temperature, and on their own internal faults. A rooftop inverter in 115-degree heat will thermally derate. Some homeowners go weeks before noticing an inverter has been offline, because the bill is the only signal.

Then there is the structural problem, which is bigger than any of the three above. On most demand plans, the on-peak window extends past the production window. SRP's Manage Demand plan runs on-peak from 5 to 10 p.m. weekdays. In midsummer, meaningful production is gone by 7:30 and completely gone by 8. That leaves several on-peak hours every single weekday with zero solar contribution and a house that is still hot, still cooling, and still reheating water.

Those shoulder hours are where demand peaks live in solar homes. A well-designed array does not help you there, because the sun is down.

Batteries help, with limits

A battery can cover a production gap if it has charge available, if it is sized for the load, and if its control logic is actually targeting demand rather than time-of-use arbitrage or backup reserve. Most residential batteries are configured for one of the latter two.

A battery also does not know what your appliances are about to do. It reacts to a load that has already appeared. A demand controller acts on the rate demand is rising and prevents the overlap from forming. The two approaches are compatible and they are not substitutes.

What SRP's 2025 change means

SRP retired traditional net metering in November 2025. New residential solar customers now go onto the Customer Generation price plan, which is a net-billing structure with time-of-use energy pricing and a demand component based on the highest on-peak power drawn from the grid.

Read that again, because it changes the economics of new solar in the SRP territory. The plan most new solar customers land on has a demand charge built into it. Export credits are lower than the old retail-rate arrangement. Customers on older solar-approved plans may have different terms; check with SRP for your specific situation.

The practical consequence is that a new solar installation in this territory is going onto a rate where controlling kW matters as much as producing kWh. A solar quote built on a straight net-metering assumption will overstate the savings.

Solar mode: how the controller handles a solar home

The Energy Sentry controller has a dedicated solar operating mode, and it changes how the unit interprets its own measurements.

In a standard installation the firmware takes the absolute value of the current it senses, so current transformer orientation does not matter. In solar mode it does not take the absolute value, because it has to distinguish between power flowing into the building from the utility and power flowing back out to the grid from your inverter. Orientation and phasing both matter.

The behavior this produces surprises people. On a sunny day, with the array producing well, the controller's instantaneous demand reading will drop to zero. That is correct. It means net demand at the meter is zero, which is exactly what you want, and it is what the utility's meter sees too. It is not a fault and the unit is not broken.

Commissioning a solar home therefore includes a step that a non-solar home does not: the installer verifies phasing with the inverter completely shut off. There is no other reliable way to confirm the controller is reading the utility side correctly, because with solar running you cannot tell a correct zero from a phasing error that also reads zero. With the inverter off, the display must show a real nonzero demand. If it reads zero with solar off, the phasing is wrong and the installer corrects it, either by moving the controller's supply breaker to the other phase or by reversing the current transformers. Then the inverter comes back on, the installer waits several minutes for it to synchronize with the line, and confirms the reading falls toward zero as production comes up.

Skipping that step is the most common cause of a solar installation that appears to work and does not.

What pairing actually does to payback

Solar reduces your energy charges. Demand control reduces your demand charges. Together they address the whole bill rather than half of it, and the combined payback is shorter than either one alone in most demand-rate territories.

The clearest example we can publish is Mountain View Methodist Church in Boulder, Colorado. Their annual electric cost went from $10,633 to $168 with solar and demand control together. Neither product does that by itself. The solar handled the energy. The demand controller kept the peak from eating the savings.

We are not a solar company and we do not sell panels. If you already have solar, the honest question is narrow: does your rate have a demand charge, and how large is it? If the answer is no, you do not need us. If the answer is yes, the demand charge is money your array is not touching.

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Questions about your own setup? Call toll free (888) 461-9336, direct (970) 461-9600, or email help@energysentry.com. Monday–Friday, 8:00 AM–5:00 PM Arizona time.