A new study suggests nearly 5 million commercial utility customers in the U.S. are at a financial tipping point that could make adding solar battery storage a good option. At this point in the evolution of energy storage technology, the most sensible application for installing a storage system is when customers are subject to relatively high electricity “demand charges.” This fee is separate from what an organization pays for energy usage, but can still amount to a significant percentage of their monthly electricity bill. 

According to a recent article published by Solar Power World (which references a collaborative paper from the National Renewable Energy Laboratory and Clean Energy Group), over one quarter of the estimated 18 million commercial utility customers in the U.S. could be dealing with demand charges of $15 or more per kilowatt. This $15 number is significant because it’s the point at which the industry generally believes commercial solar power storage could make sense due to the potentially substantial savings. While switching to alternative energy sources like solar can be a great answer for how to lower electricity bills, over 25% of commercial utility customers could experience even greater savings.

The article shares some other surprising numbers:

The charges affect private and nonprofit businesses, as well as a wide array of additional customers, including community facilities, public buildings, and multifamily housing properties. In many cases, these demand charges can comprise anywhere from 30 to 70 percent of a customer’s utility bill.

These extra charges often result from periodic “spikes” in electricity demand. If they regularly happen when the sun’s not shining, battery storage (after being charged up by a solar system, e.g.) has the potential to step in and reduce these peaks of demand—and subsequently reduce demand charges. This additional energy savings is what usually makes commercial battery storage a workable solution for solar customers.

“Every day we speak to school districts, municipalities and other companies who face increasing costs in their utility bills,” said Vic Shao, CEO at Green Charge. “…Energy storage directly addresses the demand charge problem so many organizations face.”

So if you’re wondering how to reduce energy costs, looking to advance sustainable business practices, or both—Solar Technologies can help you determine whether commercial solar and/or battery storage makes sense for your organization

This post originally appeared on the SunPower Business Feed.

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