Understanding load factor

What is Load Factor?
Load factor is a measurement of the efficiency of your household’s electrical energy usage. It is calculated by taking the total electricity (kWh) used in the month, divided by your peak demand (kW) multiplied by the number of days in the billing cycle and the total hours in a day. The result is a ratio between zero and one, and the higher the ratio or percentage, the more efficient your household is using electricity.

Why is Load Factor important?
SLV REC must be able to meet members’ peak demand for electricity at all times. A demand rate structure, like REC’s, automatically rewards members for improving their load factor.

How can we improve Load Factor?
Lower your peak demand by delaying or staggering usage instead of running all your appliances at once.

From the A graph, we can conclude that the load demand is very high during the period 8-16. If we shift some load during below average load period like 4-8 or 20-24, as shown in the B graph, then the maximum demand will be reduced, improving the Load Factor. This helps to reduce the demand charge billed.