Because the vast majority of electricity is generated in direct, instantaneous response to demand, costs of electricity differ dramatically between high demand (“on peak”) and low demand (“off peak”) periods.
By installing energy storage on the grid, both utilities and consumers are able to shift their demand out of on-peak periods and into off peak periods, flattening their energy consumption profile:
This reduces energy costs for the average user on the system, regardless of whether or not they are the user of time-shifted electricity.
Commercial electric customers on time-of-use rate schedules have a compelling financial opportunity in the form of energy arbitrage.
Peak shifting also lessens the total effect of electric vehicle charging on the grid, and makes electric vehicles less expensive per mile.