California’s goal of achieving 100% carbon-free electricity by 2045 is changing the way we think about building energy performance. Reducing annual energy consumption alone is no longer enough. Growing electrification is placing greater demands on the grid, particularly during periods of peak demand.
For years, building performance has been evaluated primarily through annual energy consumption using conventional units of kWh and therms or BTU. But what happens when two buildings have the same annual energy use, while one places significantly more stress on the electrical grid during critical hours?
That is where peak demand becomes increasingly important.
the grid. (Source: US DOE, “Grid-interactive Efficient Buildings Technical Report Series”)
Peak Demand – The Basics
When a building uses energy can be just as important as how much energy it uses over the course of a year. To manage the demand on the grid, the U.S. Department of Energy identifies four flexibility strategies:
Efficiency permanently reduces the amount of energy a building requires.
Load shedding temporarily reduces consumption during critical periods.
Load shifting moves consumption from one time of day to another.
Modulation continuously adjusts building loads in response to conditions, operating needs, or grid signals.
Advanced technologies such as solar PV, batteries, thermal energy storage, and Building Management System (BMS) are used to manage demand.
These technologies will play an important role as California’s electricity system evolves. However, they also come with high upfront costs, additional embodied carbon, and greater complexity in operations, maintenance, and implementation. New technologies introduce a learning curve—and opportunities for misapplication or operational mistakes. Before adding more technology, it is worth asking: How much of the peak demand can we eliminate through the building’s design before relying on larger and more complex systems?
Rethinking the Fundamentals
For years we emphasized passive design strategies, but many of these approaches have gradually been overlooked as energy became relatively inexpensive and readily available. With rising energy costs, grid constraints, and increasing geopolitical uncertainty, it is becoming increasingly important to revisit these time-tested strategies.
Solar shading prevents solar heat gain before the HVAC system needs to remove it. Horizontal overhangs, vertical fins, exterior shading devices, and solar-control films reduce afternoon solar gains and, consequently, cooling peaks. Advanced solutions, such as dynamic glazing, can provide levels of solar control by adjusting optical properties as outdoor conditions change.
Our experience as Verdical Group’s Energy & Carbon team, time and time again, has shown that building orientation and façade design can have a significant impact on both occupant comfort and peak cooling demand. Large areas of glazing on a west façade might create issues with occupant comfort because of significant afternoon solar gains precisely when cooling systems are approaching their peak.
that stored heat is transferred or released. Engineers typically measure thermal lag as the time between
peak outdoor temperature and heat flow arriving at the indoor surface of a wall or room. (Source: H2X Engineering)
Thermal mass absorbs and releases heat gradually, can reduce indoor temperature swings, while also shifting peak HVAC demand. Thermal mass can help moderate fluctuations and reduce the intensity of cooling loads during critical peak hours. And where climate, comfort, and indoor-air-quality requirements allow, natural ventilationprovides cooling during favorable outdoor conditions and reduces mechanical cooling demand during certain peak periods.
While these strategies must be carefully optimized, their impact on overall energy consumption can vary. If implemented incorrectly, some strategies may have little effect or even slightly increase total energy use. However, these strategies can significantly reduce or shift peak demand during critical hours.
Revisiting System Sizing
While designing around peak demand represents a shift in how we think about building design, it also creates an opportunity for the mechanical engineering community to reconsider how we approach system sizing. As buildings become increasingly electrified and peak electrical demand becomes a more important consideration, we may need to revisit some of the traditional assumptions we use in sizing HVAC systems.
Engineering design appropriately accounts for uncertainty and extreme weather conditions. HVAC systems are typically sized using ASHRAE standards—a 1% cooling design condition is commonly used for cooling, while heating is generally based on the 99% heating design condition.
These design conditions are already intended to represent relatively extreme weather conditions. However, when additional conservative assumptions and safety factors are layered on top, equipment can become significantly oversized relative to the building’s actual load during most operating hours.
Engineers may add a 5% to 15% safety margin to standard design-day calculations for very practical reasons. Load calculations are based on assumptions and idealized conditions, while real buildings experience uncertainties such as infiltration, equipment degradation, changes in occupancy, and future load growth. Additional capacity may also be needed for rapid morning warm-up or cool-down following nighttime setbacks. Ultimately, a modest safety margin can provide an important buffer against uncertainty, professional liability, and costly callbacks.
So we should ask ourselves:
Are we designing for the actual building load—or are we repeatedly adding layers of conservatism to an already conservative calculation?
Conclusion
Traditionally, the building industry has focused primarily on reducing total annual energy consumption. With relatively inexpensive and readily available energy, there was also little incentive to invest in passive strategies that might require more upfront design consideration. Today, as we face increasing pressure to reduce carbon emissions, electrify buildings, and manage growing demands on the electrical grid, we need to broaden our perspective and design not only for lower energy consumption, but also for lower and more manageable peak demand. This shift creates an important opportunity to bring passive design strategies back into the conversation and apply them more intentionally and confidently as part of an integrated approach to building design.
We can achieve significant peak-demand reductions by rethinking both architectural and MEP design approaches. And when we combine those strategies with advanced technologies, we have the potential to reduce peak demand at the building level, and to better manage the grid and support its long-term stability.
This is a more resilient approach to building design. We can reduce loads through passive strategies and fundamental architectural design principles—and then meet the remaining loads with smaller, more appropriately sized equipment.
We can make buildings inherently more efficient and resilient rather than relying solely on technology to compensate for high energy demand. And, if we face a grid disruption or power outage, a building designed with lower loads, passive strategies, and right-sized systems will be better positioned to maintain acceptable conditions and remain resilient for longer.
Ultimately, the goal is to design for resilience by reducing the building’s overall needs—and, most importantly, its needs during times of crisis.
Interested in learning more about this topic? Join Sara’s educational session at Verdical Group’s Net Zero Conference on October 8 at the Los Angeles Convention Center. Her panel will explore how passive design strategies can not only reduce overall energy consumption but, more importantly, help lower peak demand during critical hours.
The Net Zero Conference convenes building professionals and climate leaders to re-envision the built environment and inspire a net zero future.The conference is a hub for people in the industry to gather, bridge knowledge gaps, and inspire a net zero future. It will feature inspiring keynotes, an educational program, an expo hall featuring leading decarbonization technologies, and the annual Trailblazer Awards Ceremony celebrating leaders in sustainability. Use the code NZALLY for 15% off all ticket types.
USGBC California Note: We invite you to attend our panel at the Net Zero Conference, “Scaling Innovation for Impact: Inside the Net Zero Accelerator”. We look forward to seeing you there!
Posted 9/3/26
About the Author
Sara Motamedi, as Director of Energy & Carbon, Verdical Group, is a building performance scientist advocating for design that is environmentally conscious but also adds value to human life. She has 10 years of experience in the green building industry, conducting many LEED, Net Zero Energy, and Title 24 projects.
Sara’s passion for sustainable design motivated her to pursue a PhD degree in the field with a specialization in energy efficiency and daylighting strategies from UT Austin. She has also gained broad experience in thermal and visual comfort analysis, python programming for integration between tools, energy simulation, and wind pattern analysis through Computational Fluid Dynamic (CFD) software. Sara’s specialties include Sustainable Design, Passive Design, Energy Simulation and Building Performance Analysis, Daylighting, CFD, and LEED projects. Sara joins Verdical Group after a couple years of entrepreneurship in energy efficiency as well as a 5-year tenure as a Senior Building Performance Analyst at a major engineering firm.
