What does improving your load factor mean to you?

Depending on your energy profile, an improvement on your load factor could mean substantial energy savings.

Load factor corresponds to the ratios between your actual energy consumption (kWh) and the maximum power recorded (demand) for that period of time (billing cycle). Demand x Number of hours in that period.

What is the Load Factor?

The load factor is an indicator of how efficiently energy is being utilized. It is the actual amount of energy (kilowatt-hours – kWh) delivered in billing cycle, as opposed to the total possible energy (kWh) that could be delivered in that same designated period of time. A high load factor indicates that the load (energy being used) is using the electric system more efficiently, whereas consumers that underutilize the electric power distribution system will have a low load factor. Electric utilities must provide power to everyone within their service area and they have to be prepared to supply it even if everyone used the maximum amount needed (peak demand) at any given time. In other words, the utility might not have to actually supply that maximum power amount, but they have to have the capacity to do so. If they do have to provide electricity at those peak times, it can be expensive. It’s simple supply and demand.

Power is expensive during peak periods. Customers who use electricity in a way that reduces or smoothes out those peaks help put less strain on the power infrastructure. That translates to the possibility for lower rates for those customers.

Load Factor is a number that gives you an idea of what kind of energy consumer you are; everything you need to calculate it can be found by looking at your electricity bill. The value of the Load factor will always be less than 100%. A lower number means that your general energy demand is far away from what your peak demand is and that you could be more efficient in your energy consumption. The closer you get to 100%, means you have fewer peaks in the way you consume energy and are more efficient in the way you consume electrical energy.

How is Load Factor Calculated?

Electrical (demand or power) Load factor is a measure of the utilization rate or efficiency of electrical energy usage. It is the ratio of total energy (KWh) used in the billing period divided by the possible total energy used within the period if used at the peak demand (KW) during the entire period. Demand Load Factor is useful in qualifying the benefits of demand control and battery energy storage strategies.

The Electricity Demand Load Factor Calculation is:

Demand Load Factor = KWh/KW/hours in the period

To calculate your load factor take the total electricity (KWh) used in the month and divide it by the peak demand (power)(KW), then divide by the number of days in the billing cycle, then divide by 24 hours in a day. The result is a ratio between zero and one.

An Electric demand Load Factor Calculation Example

Monthly Energy Use 2000 KWh

Monthly Peak Electric Demand 35 KW

Days in the Month 30

Hours in a Day 24 days

Power Load Factor = 2000/35/30*24 = 79.4%

How to Improve Load Factor:

The higher the load factor the better, but how do you increase your load factor?

Improving load factor is primarily about controlling peak demand. Lowering the peak demand will automatically help to increase the load factor percentage.

One way you can do this is by shifting some of your energy usage away from peak times.  For example, In a residence you may want to shift your washing and drying of clothing to the late evening. Another way is by installing a programable thermostat could also help by turning off or increasing your thermostat setting throughout the day when peak demand is high and then reducing it in the early evening. You’ll be relieving the electric grid and your wallet at the same time.