Load Factor...What It Means...
Understanding Load Factor...
Load Factor describes the efficiency of a facility's electrical usage. It is calculated as the ratio between the total electricity used over a period of time and the total electricity that would have been used over the same period had the facility operated at that period's peak demand during the whole period. Load Factor is indicative of the consistency of energy usage during a period and is expressed as a number between 0 and 1.
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For example, a facility which operates in a constant state where energy usage remains constant (i.e., the average demand is equal to the peak demand) has a Load Factor of 1. On the other hand, a facility which experiences short periods of high usage followed by extended periods of lower usage (such as an office building on a summer day or a foundry that melts during certain hours) will possess a Load Factor of less than 1.
The portion of the electric bill that corresponds to peak demands, typically termed the "demand charge", is determined by how a facility's peak demand contributes to the electrical utility's overall need to provide electrical capacity on the grid (especially during periods of high energy usage, such as summer afternoons). Therefore, a certain part of the total electric bill is driven by the peak demand, regardless of the facility's energy usage during the rest of the period.
A facility with a Load Factor of 0.6 or more would be considered to be reasonably efficient in its distribution of energy usage. Facilities with Load Factors of less than 0.6 have the opportunity to investigate load shifting and peak shaving solutions. Remember, a higher Load Factor means energy usage is more evenly distributed throughout the period. Load balancing is an integral component to any Facility Energy Assessment.