How California Grocery Stores and Cold Storage Facilities Can Lower Electricity Costs Without Buying a Battery

Refrigeration never takes a night off. Cases, walk-ins and freezers run every hour the store is open and every hour it is closed, and in a cold storage warehouse they are nearly the whole bill. That steady load runs straight through the hours when California electricity costs the most.

This guide explains why refrigerated buildings in California pay so much for power, how the utility rate your site is on changes where savings come from, and how SmartGrid Western installs and operates a battery at qualifying sites with no capital and no lease. If you also own or operate hotels, our guide for California hotels covers the same model for hospitality properties.

Why refrigerated buildings pay more for power

Food stores are among the most energy-intensive commercial buildings in the country. The U.S. Energy Information Administration found that food sales buildings use 53.3 kWh of electricity per square foot each year, more than four times the 12.6 kWh average for all commercial buildings. Refrigeration takes the largest share, 38% of their electricity use.^[1]

Cold storage is even more concentrated. The Global Cold Chain Alliance puts cold storage facilities at nearly 25 kWh per square foot, with refrigeration-related operations at more than 75% of total energy costs.^[2] California has more refrigerated warehouse capacity than any other state: 370 million cubic feet across 102 warehouses in USDA’s most recent survey.^[3]

The 4–9 p.m. window lands on every business day

California’s major utilities price commercial power highest from 4 to 9 p.m. At PG&E, that window applies every day, including weekends and holidays.^[4] A grocery store is open and at full load through all five of those hours, seven days a week. Summer makes it harder: condensers reject heat into hotter outdoor air, so compressors draw more power on the same afternoons the rates are highest.

Your rate schedule decides where savings come from

Every commercial bill names its rate schedule, such as B-10, B-19 or AL-TOU-L. That code matters more than any rule of thumb, because California’s rates split costs between energy and demand very differently.

In San Diego, those numbers add up fast. A store on AL-TOU-L that adds 50 kW during a single summer evening pays about $3,450 for it in on-peak demand charges that month. SDG&E also bills non-coincident demand on the higher of the current month’s maximum or 50% of the highest demand over the past year,^[6] so a summer peak can keep costing money into the following spring.

On PG&E’s medium B-10 rate, the picture is different. There is one demand charge that applies at any hour, so more of the value comes from shifting energy out of the 4–9 p.m. window, where summer power costs about 9.4 cents more per kWh. SCE’s commercial rates bill separate facilities-related and time-related demand charges, with amounts that depend on the rate option and service voltage.^[7] Rates change several times a year, and we follow those changes on our news page.

What the battery does at a refrigerated site

The battery charges when power is cheaper, overnight and in the middle of the day, then supplies the building through the 4–9 p.m. window and during the spikes that set your demand charges. It sits behind the meter, on your side, and runs alongside the existing electrical system.

It does not touch your refrigeration. Setpoints, controls, alarms and service contracts stay exactly as they are, and if the battery is ever offline, the building draws from the grid the way it does today. Your utility account and meter don’t change. Because refrigeration load is steady, the battery’s main job is covering the evening window and trimming the peaks that sit on top of that base load. That is why we model every site from its own 15-minute interval data rather than a generic estimate. The How It Works section on our home page walks through each step.

Spoilage, shutoffs and backup power

For anyone storing food, an outage is an inventory problem, not just an inconvenience. California utilities can cut power in high-fire-risk conditions through Public Safety Power Shutoffs, and those events can last days.^[8]

A battery sized for bill savings is not a backup system by default. Keeping refrigeration running through an outage requires extra engineering: selected critical loads, switching equipment and battery capacity held in reserve. Where resilience matters, we model it as a separate option, often alongside the generator a site already has. It is also worth asking your insurer whether spoilage from a planned utility shutoff is covered under your current policy.

Why there’s no capital cost

You don’t buy the battery, and you don’t lease it. SmartGrid Western provides the capital, the equipment, the installation, the monitoring and the ongoing operation. Three things fund the project:

1. Investment capital. Investors fund the system at qualifying sites.
2. Federal incentives. Battery storage is eligible for the federal clean electricity investment tax credit under Section 48E.^[9] The July 2025 federal tax law kept the credit for energy storage while ending it early for many wind and solar projects.^[10]
3. Shared savings. The system lowers your electricity costs. Your business keeps an agreed share of those savings, and we make our money by sharing in the value the system creates.

There’s no capital request to fit around a remodel or a new refrigeration rack, and no ongoing equipment or maintenance expense. The main budget change is planning for lower utility costs. Our benefits overview covers the rest of the model.

From one bill to a running system

1. Screen. You send one recent electric bill per site. We tell you whether each site looks like a candidate.
2. Model. For sites that pass, you share 12 months of billing or authorize access to your utility data. We size the system against your actual demand peaks and tariff.
3. Agree. You review a proposal that shows how savings are calculated and what each party is responsible for.
4. Build. We handle design, local permitting and fire-code review, and utility interconnection, which runs under Rule 21 at PG&E, SCE and SDG&E.^[11][12] You provide site access and approve the equipment location, and any shutdown is scheduled around your operating hours.
5. Operate. We monitor, optimize and maintain the system for the life of the agreement. You keep running the business.

Multi-store owners and leased sites

Grocers who run several stores can screen them together, and one agreement structure can cover multiple sites. Distribution centers and cold storage buildings are evaluated the same way. Cold storage is one of several property types on our industries page.

Leasing your building doesn’t rule you out. An agreement can often be structured around the remaining lease term, and because most of the equipment sits outside, your landlord will typically need to approve its location. We work with both parties. More detail on leases and property sales is on our questions page.

The honest conditions

• Not every site qualifies. The economics depend on your usage, rate schedule, load profile and interconnection requirements. A medium PG&E site on B-10 has a different case than a large SDG&E site on AL-TOU-L, and we will tell you which side of the line yours falls on.
• The equipment needs space. The site needs a suitable outdoor spot for the battery and its associated equipment.
• Timing matters. California’s Self-Generation Incentive Program closed its ratepayer-funded storage budgets to new applications at the end of 2025,^[13] so today’s projects rest on bill savings and the federal credit. Available capital and incentives keep changing.

Your business does not own the system. In return for hosting it, you share in the savings it creates. If you know another refrigerated business spending $10,000 or more a month on electricity, our referral program makes the introduction easy.

Questions grocers and cold storage operators ask