Bill guide
How to reduce your factory electricity bill: the eight places it leaks money.
An industrial electricity bill is more than units times a rate. It has a demand charge, power factor effects, time-of-day prices and surcharges, and each one has its own fix. Here are the eight places money usually leaks, and where to start.
What makes up the bill
| Part of the bill | Set by | Can you reduce it? |
|---|---|---|
| Energy charge | Units used (kWh or kVAh) × rate | Yes: less waste, better power factor on kVAh |
| Demand charge | Maximum Demand or a share of Contract Demand | Yes: lower peak, right-sized CD |
| TOD surcharge or rebate | When the units were used | Yes: move flexible loads |
| Power factor surcharge or rebate | Average power factor (on kWh tariffs) | Yes: correction that works |
| Electricity duty, fuel surcharge | Percentages on the above | Only by reducing the above |
1. Maximum Demand
One 15- or 30-minute interval sets the month’s demand charge. Find it, stagger start-ups and watch the running interval. See how to reduce Maximum Demand.
2. Contract Demand
Set too high, you pay for capacity you never use. Set too low, you pay excess-demand penalties. See Contract Demand.
3. Power factor and kVAh billing
On a kVAh tariff, every unit costs more below unity power factor. On a kWh tariff, low power factor brings a surcharge. See power factor penalty and improve power factor.
4. Time of day
The same unit costs more in peak hours. Loads that can move to off-peak hours save on every unit moved. See TOD tariff.
5. Idle and base load
Machines left running between jobs, at lunch and overnight, and compressors feeding leaks, are paid for at full rate. See machine running and idle tracking.
6. Load factor
A low load factor means you pay a demand charge on capacity you touch only briefly. Raising it lowers the demand cost of every unit. Work out yours with the load factor calculator.
7. Solar and DG
Solar that trips and stays off, solar exported cheaply instead of used on site, and a DG running lightly loaded all cost money. See solar, DG and grid monitoring.
8. Billing errors
Wrong tariff category, wrong multiplying factor, estimated readings and charges that do not match the tariff order happen more often than most plants check. Our free bill check reviews your bill against your tariff.
Measure before and after
A saving you cannot measure is a saving you cannot prove: to the owner, the auditor, or a lender. Government schemes such as BEE’s ADEETIE ask for energy savings to be measured and verified after the project. Record the load and the bill figures before a change, then compare after it.
Where to start
For most plants, the order that pays back first is: bill errors, Maximum Demand, power factor, idle load, then TOD shifts. The first three often need no new equipment at all.
How KONDUKTOR® EMS helps
KONDUKTOR® EMS shows where the money is going, and your team acts on it. It warns as Maximum Demand approaches Contract Demand, flags low power factor, peak-hour consumption and idle machines, and estimates the savings in rupees on your tariff. Automatic control of chosen loads through Modbus I/O cards is engineered for your plant as part of your project. Actual savings depend on your tariff, your plant and the actions taken.
Common questions
What is the fastest way to reduce a factory electricity bill?+
Check the bill for errors first, then look at Maximum Demand and power factor. These three often need no new equipment: a correct tariff, staggered start-ups and repaired capacitor steps can lower the next bill.
Can an energy monitoring system reduce our bill?+
Not on its own. It shows where the money is going: the interval that set Maximum Demand, low power factor, peak-hour use and idle machines, with the savings in rupees. Your team acts on it, and actual savings depend on the plant and the actions taken.
Which charges on an industrial bill can be reduced?+
The demand charge, the energy charge through less waste and better power factor, TOD surcharges, and power factor surcharges. Duty and fuel surcharge fall automatically when these fall.
See where your bill is leaking money.
Book a live demo and see Maximum Demand, power factor, TOD and idle load on meters like yours.