Peak electricity demand across the PJM Region is projected to grow 42% by 2036, while new power generation struggles to keep pace. An August 2026 report from the New Jersey Board of Public Utilities highlights the growing capacity challenges facing the PJM power grid and their implications for electricity costs and reliability. For commercial and industrial businesses, onsite solar, battery storage, and demand response offer opportunities to manage electricity costs, support business growth, and take a more active role in their energy strategy.
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For decades, the relationship between businesses and the electric grid was straightforward: utilities and power generators supplied electricity, the grid delivered it, and businesses consumed it.
That relationship is changing.
Electricity demand is growing drastically after nearly two decades of relatively flat consumption. Data centers, artificial intelligence, electrification, and expanding domestic manufacturing are placing new demands on an electric system already facing infrastructure constraints. Businesses, meanwhile, face higher electricity costs and reliability concerns.
According to PJM forecasts cited in an August 2026 report from the New Jersey Board of Public Utilities (NJBPU), peak electricity demand across the PJM Region is expected to increase approximately 42% between 2026 and 2036. At the same time, new power generation is struggling to keep pace, and PJM capacity market prices have increased more than tenfold compared with the 2024/2025 delivery year.
Capacity auctions are how PJM secures commitments from power resources to be available when electricity demand is highest. Electricity customers ultimately pay the costs, either through supply rates or separate capacity-related charges, depending on their electricity agreements.
Despite these significantly higher prices, PJM's two most recent capacity auctions failed to secure enough resources to meet its required reliability reserve margins.
In its report, An Investigation of PJM's Capacity Market, NJBPU concluded that current supply and demand conditions are preventing PJM's existing capacity market design from maintaining adequate power resources at the lowest cost.
For commercial and industrial organizations, there is a more immediate question:
How can businesses gain greater control over energy costs, capacity, and operations as electricity becomes more constrained and expensive?
Increasingly, the answer involves taking a more active role in how energy is generated, stored, and consumed.
For CFOs, facility managers, and business owners, electricity has traditionally been treated largely as an operating expense: the facility consumes what it needs and pays the bill.
That model becomes more challenging when costs rise, facilities need additional power to support growth, or grid constraints make new capacity harder to secure.
Onsite solar, battery energy storage systems (BESS), and microgrids offer another approach. A facility can generate some electricity onsite, while battery storage gives greater control over when it buys electricity from the grid and when it relies on stored energy. Microgrids can integrate these technologies with intelligent controls to help maintain critical operations during grid outages.
The result is a shift from simply consuming electricity to actively managing the facility's interaction with the grid.
Demand-side flexibility can also help address broader grid capacity constraints by reducing electricity demand during critical periods, potentially offering a faster and less expensive alternative to adding new generation.
Commercial solar allows organizations to turn roofs, parking areas, and available land into energy-producing assets. Every kilowatt-hour generated and consumed onsite is a kilowatt-hour the facility does not need to purchase from the grid at that moment.
Battery storage adds the ability to shift when a facility relies on grid electricity.
A battery can charge during lower-demand periods and discharge when facility demand or electricity costs are higher, helping reduce demand peaks and certain utility charges. Depending on rate structure and market participation, reducing grid consumption during PJM system peaks may also lower exposure to capacity-related cost allocations.
A business does not necessarily need to consume less electricity overall. Instead, it can shift when it draws electricity from the grid as part of an operational strategy that can reduce utility costs and create opportunities for additional revenue.
During periods of high system demand, businesses participating in PJM demand response programs may be compensated for temporarily reducing grid consumption. Battery storage can help accomplish this with less operational disruption by serving part of the facility's load with stored electricity. Participation typically occurs through a qualified demand response provider, with compensation depending on program requirements, performance, and market conditions.
This creates a useful alignment: the grid needs resources that can respond during periods of stress, while businesses want to reduce costs and extract more value from their energy assets.
The value of onsite energy systems goes beyond any single application. Solar and battery storage can work independently or together to reduce grid electricity purchases, manage peak demand, and create additional financial and operational benefits. The right combination depends on a facility's energy usage, cost structure, and business priorities.
ENERGY COST REDUCTION
| STRATEGY | WHAT IT DOES | POTENTIAL BUSINESS VALUE |
|
Onsite Solar |
Reduces grid electricity purchases | Lower electricity costs |
PEAK DEMAND & GRID PROGRAMS
| Peak shaving | Uses batteries during peak demand | Lower demand charges |
| PJM peak management | Reduces grid demand during system peaks | Potential capacity-cost savings |
| Demand response | Reduces grid when called upon | Potential program revenue |
| Load management | Coordinates EV charging and other loads | Avoids costly demand peaks |
OPERATIONAL RESILIENCE & CAPACITY
| Resilience | Can support critical loads during outages | Reduced operational disruption |
| Capacity management | Helps manage additional electrical loads | May defer infrastructure upgrades |
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Perhaps the bigger shift is that energy strategy is becoming increasingly tied to business growth.
Organizations adding manufacturing equipment, electrifying fleets, or expanding facilities may require additional utility capacity. Securing that capacity can require infrastructure upgrades, add costs, and lengthen project timelines.
Electricity can therefore affect how quickly and economically a facility can expand.
Onsite generation and battery storage can help manage new loads and, in some circumstances, reduce or defer additional utility capacity.
A facility adding EV charging, refrigeration, or production equipment, for example, may find that its challenge is not total annual electricity consumption, but the peaks created when large loads operate simultaneously. Solar and storage can help reshape those peaks.
For businesses planning growth, they may need to address energy availability and infrastructure earlier in capital and expansion planning.
Ultimately, the economics need to work for the business investing in these systems.
The opportunities are site-specific. The business case depends on factors such as load profile, utility tariff, operational requirements, available incentives, infrastructure, and financing structure.
There is no universal solar-plus-storage configuration. The starting point is understanding where, when, and why a facility consumes electricity—and what those consumption patterns are costing the business.
The NJBPU study focuses on a wholesale capacity market that most businesses will never interact with directly. The forces behind it, however, have implications far beyond that market.
As the PJM Region works to address growing electricity demand and capacity constraints, businesses face their own challenge: securing reliable, affordable power while planning for future growth.
Onsite solar, battery storage, and microgrids create an opportunity for those interests to overlap. They let organizations make more deliberate decisions about where their electricity comes from, when they buy it from the grid, and how energy infrastructure supports the wider business.
As the energy market changes, businesses need to look beyond how much electricity they use and what it costs. The question is becoming broader:
Pfister Energy develops and delivers integrated onsite energy systems for commercial, industrial, and institutional organizations. Through an in-house development and EPC model, we provide single-point accountability and expertise from initial analysis through engineering, construction, and ongoing operations.
For organizations facing rising energy costs, new electrical loads, facility expansion, or resilience requirements, the first step isn’t choosing a technology. It’s understanding the facility's energy profile and where greater control could create measurable value.
Source: New Jersey Board of Public Utilities, An Investigation of PJM's Capacity Market, August 2026. https://nj.gov/bpu/pdf/reports/AN_INVESTIGATION_OF_PJMs_CAPACITY_MARKET_FINAL_8.12.26.pdf