Understanding Your Energy Bill: Demand Charges, Delivery Fees, and How Solar Can Help

Let’s face it—most energy bills are a confusing wall of numbers. But if you’re a homeowner or business owner in Alberta, understanding how your bill is structured can reveal major opportunities to save money—especially with the right solar setup.

The 3 Main Parts of Your Energy Bill in Alberta

Whether you’re on a regulated or competitive rate, your energy bill generally breaks down into three main sections:

1. Energy Charges

This is the cost of the electricity you actually use, measured in kilowatt-hours (kWh). If you’re on a floating rate, this price fluctuates monthly with the market. If you’ve locked in a fixed rate, it stays stable.

2. Delivery Charges

This is where things get interesting—and expensive.

Delivery charges cover the cost of getting electricity from the power plant to your property. They’re made up of:

• Distribution charges (local grid infrastructure)
• Transmission charges (moving power over long distances)
• Rate riders (temporary fees, adjustments, or credits)

Homeowners are typically charged delivery fees based on their total energy consumption.

Commercial properties, on the other hand, are often charged based on their peak demand—the highest amount of electricity they draw during just a few hours each year.

Yes, you read that right: Two hours of high usage in a single year can determine your rate class—and impact your delivery charges for the rest of the year.

If your peak demand falls during one of the utility’s measurement windows, you could be bumped into a more expensive rate class, resulting in thousands of dollars in additional charges—even if your overall usage is modest.

3. Administrative Charges

These are the flat monthly fees your retailer and utility provider charge for account maintenance, billing, and meter reading.

The Power of Timing

The good news is that solar energy gives you tools to fight back against these charges—especially if you’re strategic.

1. Offset Energy Charges

Solar panels generate power during the day—right when rates are typically highest. That means you draw less from the grid when it costs the most.

2. Shave Peak Demand

With the right solar system—especially when paired with energy storage—you can limit those short demand spikes that determine your rate class. That can keep you in a lower delivery rate band for the entire year.

3. Power Factor Correction

Many commercial operations suffer from poor power factor, especially those using motors, compressors, or older lighting. Installing power factor correction equipment (like capacitor banks) improves electrical efficiency, flattens demand peaks, and may help avoid being bumped into a higher rate class.

4. Behavioral Changes & Load Management

Simple operational changes—like staggering equipment start-up, avoiding unnecessary simultaneous loads, and programming smart building controls—can dramatically reduce your peak usage windows throughout the year.

This Isn’t Just for Large Industrial Users

We see this affect:

• Restaurants
• Warehouses
• Farms
• Retail shops
• Even mid-size offices

If your usage profile includes a few short, high-demand periods, you could be paying way more than necessary.

TL;DR

TL;DR

All of these can help keep your peak demand low and your costs in check.

Alberta energy bills are split into Energy, Delivery, and Admin charges.

Delivery charges are especially costly for commercial users due to peak-based rate classing.

Just two hours of high usage per year can increase your delivery rates for the rest of the year.

You can fight back with:

Solar generation

Battery storage

Power factor correction

Behavioral and load management strategies

Let Us Break Down Your Bill

reach out to sales@solardev.ca for more information