An electrical demand factor is the ratio of the maximum demand of a system, or part of a system, to the total connected load of that system. It is expressed as a fraction or percentage that cannot exceed 1, or 100%. (Electrical Engineering Portal). In Canadian practice, demand factors are the mechanism through which the Canadian Electrical Code (CE Code) and the Ontario Electrical Safety Code (OESC) allow a feeder or service to be sized for the load a building is expected to draw, rather than for every nameplate rating added together. This guide explains the definition, the calculation, the code framework and the points at which a design decision requires a professional engineer.
TL;DR
- Demand factor equals maximum demand divided by total connected load, and it is never greater than 1.
- Demand factor, diversity factor and load factor answer three different questions: sizing a circuit group, sizing a system across several groups, and describing utilization over a billing period.
- In Canada, demand factors are applied through Section 8 of the CE Code, and Ontario applies them through the OESC, with the Electrical Safety Authority (ESA) publishing interpretive bulletins.
- For existing installations, demonstrated loads from measured data may replace calculated loads, but the person who relies on them carries responsibility for the result.
- Electric vehicle supply equipment (EVSE) is added at 100% unless an Energy Management System (EMS) limits it under Rule 8-500.
Table of Contents
- What a demand factor measures
- The formula and a worked example
- Demand factor, diversity factor, connected load and load factor
- How the CE Code applies demand factors in Canada
- Ontario practice: ESA bulletin 8-3 and the 125% method
- Demand factors for electric vehicle charging
- Provincial variation and other Canadian sources
- Where demand factors go wrong in practice
- Our perspective
- Engineering support for load calculations in Ontario
- FAQ
- Sources
What a demand factor measures
Every building contains more connected equipment than it will ever operate at one moment. Lighting circuits, receptacles, motors, heating, cooling and cooking equipment are rated for their individual worst case, yet occupants, schedules and process constraints prevent all of them from running together. The demand factor expresses this observation numerically for a defined group of loads.
The definition has two components. The connected load is the arithmetic sum of the rated nameplate power of every piece of electrical equipment installed in a premise, which represents the theoretical maximum if every device operated simultaneously (Journal of Advances in Applied and Fundamental Research). The maximum demand is the highest load the group actually imposes over the period considered. The ratio between them is the demand factor.
An academic treatment of building standards describes load calculation as a statistical and empirical exercise rather than a simple sum, because no building operates every appliance at once (same source). The same source notes the cost of getting it wrong in either direction: undersized systems suffer voltage drop, overheating and fire risk, while oversized systems waste capital and incur higher no-load losses.
The formula and a worked example
The calculation is a single division, usually expressed as a percentage:
Demand Factor = (Maximum Demand Load / Total Connected Load) × 100 (ElecDatum)
The following figures are illustrative and do not describe any particular project. A small commercial tenant space has 100 kW of connected equipment across lighting, receptacles, rooftop units and kitchenette appliances. Metering or a load study shows that the highest simultaneous demand is 70 kW.
- Demand factor = 70 kW / 100 kW = 0.70, or 70%.
- If a second tenant space on the same panel has 60 kW connected and a 45 kW maximum, its demand factor is 75%.
The result is a property of the load group, not of the building as a whole. Lighting in a warehouse may carry a factor near 100% because it is on during every working hour, while the receptacle load in the same building carries a much lower figure. This is why the CE Code assigns factors by occupancy and by type of equipment rather than offering a single percentage.
Demand factor, diversity factor, connected load and load factor
The four terms are frequently confused in search results and in specifications, and each belongs to a different stage of design or billing.
| Term | What it compares | Typical use |
|---|---|---|
| Connected load | Sum of nameplate ratings | Starting point for any calculation |
| Demand factor | Maximum demand of a group to its connected load | Sizing feeders and services |
| Diversity factor | Sum of individual maximum demands to the maximum demand of the whole system | Sizing upstream equipment that serves several groups |
| Load factor | Average load to maximum demand over a period | Utility tariffs and planning |
The diversity factor is the ratio of the sum of the individual maximum demands of subdivisions to the maximum demand of the total system, which is why it is always 1 or greater, whereas a demand factor is 1 or less (Electrical Engineering Portal). Load factor is the ratio of the average load over a designated period to the maximum demand recorded in the same period, and it is used by utilities for tariff and planning purposes rather than for circuit sizing (Journal of Advances in Applied and Fundamental Research).
A practical consequence follows. A facility with a high load factor uses its capacity steadily, which is favourable for demand charges, yet it may still have a low demand factor against its connected load if it was oversized. The two figures describe different relationships and neither can be derived from the other.
Demand versus energy consumption
Maximum demand is the highest average kVA recorded during a demand interval within the month, whereas kWh measures energy consumed over time (ECT). A building can consume a modest number of kilowatt-hours and still register a high demand if its loads coincide for a short interval. For this reason the service size is governed by demand, and the energy bill is governed by consumption together with any demand charge.
How the CE Code applies demand factors in Canada
Under the CE Code, demand factors are applied in Section 8 to calculate the load for feeders and services based on specific occupancy types and equipment (IAEI Magazine). Rules 8-200 and 8-202 address single dwellings and apartment-type occupancies, and later rules in the same section address other occupancies and equipment. Ontario adopts the CE Code with amendments as the OESC, so the rule numbers are generally aligned while Ontario-specific variations and ESA bulletins govern local interpretation.
The same IAEI column notes that, historically, in typical Canadian residential buildings the actual demand has been approximately 65% of the load calculated under Rule 8-200 or 8-202. This confirms that the calculated load is deliberately conservative. It is a design basis intended to protect the installation, not a forecast of daily use.
Calculated, demand and demonstrated loads
Three terms appear in the code and should be kept distinct.
- Calculated load: the sum of connected loads under the rules of Section 8, before demand factors are applied.
- Demand load: the calculated load after the Section 8 demand factors are applied. This is the figure used to size the conductors and overcurrent devices.
- Demonstrated load: a figure based on measurement. Rule 8-106(8) permits demonstrated demand loads based on measured data over the most recent 12-month period for existing installations, provided the calculation accounts for loads that are added (IAEI Magazine).
Demonstrated loads are most useful when an owner wishes to add equipment to an existing service and wants to avoid an upgrade. They also explain why metered interval data has become a standard input to expansion projects. Where a service change is the likely outcome, our guide to the electrical service upgrade process in Ontario describes the stages that follow.
Ontario practice: ESA bulletin 8-3 and the 125% method
The ESA bulletin on maximum circuit loading and demand factors provides the most direct Ontario guidance on the topic. For a single dwelling unit, it permits peak demand to be calculated as the highest hourly value supplied by the local distribution company (LDC), in kWh, multiplied by 125%, then by 1000 and divided by 240 V (ESA Bulletin 8-3-16). The 25% allowance accounts for diversity within the hour, since an hourly kWh figure averages out short peaks.
The following example is illustrative. Suppose the highest hourly reading in the previous 12 months is 8 kWh.
- 8 kWh × 125% = 10 kWh.
- 10 kWh × 1000 = 10,000 W.
- 10,000 W / 240 V ≈ 41.7 A.
The resulting 41.7 A is the peak demand current to which new loads are added. The same bulletin gives an example of the consequence: an Ontario service upgrade for a hot tub addition can be avoided if the sum of the existing 12-month peak demand and the 100% nameplate rating of the hot tub is less than or equal to the service ampacity (ESA Bulletin 8-3-16). The added load is taken at its full rating, not reduced by a factor, which is the conservative treatment for a single new continuous load.
This is the Ontario answer to the frequently asked question about the “1.25 rule”. In this context it is a method for converting metered hourly data into a peak demand figure. It should not be confused with the separate 125% continuous-load multipliers that appear elsewhere in electrical codes.
Alternative factors for motors and air conditioning
The bulletin also states that a qualified person, such as a professional engineer or licensed electrical contractor, may use demonstrated loads or alternative demand factors for motors and air conditioning as permitted by OESC Rules 8-106(5) and 8-106(9). The ESA cautions that anyone doing so is responsible for any resulting undesired system malfunctions or nuisance outages (ESA Bulletin 8-3-16). The permission is genuine, and so is the liability. For mechanical-heavy buildings, the decision to depart from the tabulated factors should be documented in the engineer’s calculation, together with the data on which it rests.
Demand factors for electric vehicle charging
EVSE is the load category in which demand factors currently receive the most attention. Two provisions in the ESA bulletin on electric vehicle charging systems define the options.
- Without an Energy Management System, EVSE loads are added with demand factors of 100%, as required by CE Code Rules 8-202 to 8-210.
- Rule 8-500 permits an EMS to monitor loads and automatically control EVSE loads, and the EVSE demand load is then limited to the maximum load allowed by the EMS (ESA Bulletin 86-1-7).
The design implication is straightforward. A parking structure with a large number of chargers and no load management must treat each charger at its full rating when verifying the service, and the building may need a larger service as a result. With a compliant EMS, the charger demand is capped at the EMS limit, which can allow more charging positions on an existing service. Our pages on EV charger load management and EV charger infrastructure design in Ontario describe how this is documented for permit review. Owners considering workplace installations may also wish to review the federal clean technology investment tax credit as it relates to charging projects.
Provincial variation and other Canadian sources
The CE Code is a model code that each province and territory adopts through its own regulation. A designer working in Ontario therefore refers to the OESC and ESA bulletins, while one in Alberta works from the Alberta adoption of the CE Code and the requirements of the authority having jurisdiction. Our guide to electrical load calculation for Alberta treats that adoption separately.
Government guidance also shows how demand factors are positioned against measured data. The British Columbia guidance for strata corporations estimates peak demand for multi-unit residential buildings as the maximum service-address kWh multiplied by one plus a safety factor, and it observes that using CE Code demand factors is typically more conservative than using measured hourly utility data to estimate spare capacity (Government of British Columbia). The observation supports the Ontario practice described above: measured data tends to reveal more capacity than the calculated method, but it requires a documented basis.
Sector-specific standards also exist. Transport Canada’s ship electrical standard, for example, specifies feeder loads for two or more motors as 125% of the largest motor plus 100% of the others that can operate simultaneously, and it sets a galley equipment load of 100% of the first 50 kW, or half of the connected load if larger, plus 65% of the remainder (Transport Canada TP 127). These rules apply to vessels and not to buildings, yet they illustrate the general structure of Canadian demand rules: a high factor for the dominant load, and graduated factors for the remainder.
Where demand factors go wrong in practice
Several recurring errors appear in load calculations submitted for permit review.
- Applying a factor to the wrong group. A demand factor belongs to a defined load group. Applying a lighting factor to a mixed panel understates the demand.
- Stacking factors. Applying a factor to a load that is already reduced by a code rule counts the same diversity twice.
- Ignoring future loads. Demonstrated loads must account for added equipment, and tenants often add heat pumps, chargers or kitchen equipment after the original calculation. Planning receptacle and appliance circuits early, as discussed in this piece on kitchen outlet planning for remodels, prevents later feeder changes during renovations.
- Using utility data without the 12-month window. A short measurement period can miss a seasonal peak, and the code basis refers to the most recent 12 months.
- Treating load factor as a sizing tool. Load factor is a billing and planning metric and does not substitute for a demand calculation.
Our perspective
We regard the demand factor as the point where an engineer’s judgment becomes visible on a drawing. The code tables are a safe starting position, and for most new buildings they should be followed without modification. The more interesting work arises in renovations, where a service has operated for years and the owner wishes to add equipment. In those projects, twelve months of interval data, a clear inventory of added loads and a calculation that a reviewer can follow frequently determine whether the building needs a service upgrade or a load-management strategy.
We also hold that demonstrated loads and alternative factors should be used only when the data supports them and when the owner understands the allocation of responsibility that the ESA describes. A smaller service is not a saving if it produces nuisance outages. Our design process therefore records the basis of every factor, so that the permit reviewer, the contractor and the property manager can verify it later.
— Sanjay
Engineering support for load calculations in Ontario
FutureGen Consulting Inc. prepares load calculations, power distribution design, power system studies and engineer-stamped drawings for residential and commercial projects in Ontario. Our team applies the OESC and CE Code to new builds and renovations, and documents demand factors in a form that supports municipal permit review. Developers, contractors, architects and property managers can review our power distribution design approach, our power system studies or contact us through the services page to discuss a project.
For projects that depend on an accurate cost basis for new service equipment, our electrical construction cost estimation service links the calculated demand to the equipment budget.
FAQ
How do you calculate a demand factor?
Divide the maximum demand of the load group by its total connected load, and multiply by 100 to express the result as a percentage. A group with 70 kW of maximum demand and 100 kW connected has a demand factor of 70%. The maximum demand must come from a defined period and from the same group of loads as the connected figure.
What is the 1.25 rule in Ontario load calculations?
For a single dwelling, the ESA permits the highest hourly LDC kWh value to be multiplied by 125%, then by 1000 and divided by 240 V to obtain peak demand in amperes. The 25% allows for diversity within the hour. It is a metered-data method and differs from continuous-load multipliers used elsewhere.
Can a demand factor exceed 100%?
No. A demand factor is a ratio of maximum demand to connected load and is at most 1. A ratio above 1 on the same basis would indicate a data error. Diversity factor, in contrast, is always 1 or greater.
Do demand factors apply to EV chargers?
Yes, but the factor is 100% unless an Energy Management System is installed. Under Rule 8-500, an EMS can limit the EVSE demand load to the maximum it permits, which allows the service calculation to reflect the controlled value.
Who may use demonstrated loads instead of the tabulated factors?
The ESA identifies a qualified person, such as a professional engineer or a licensed electrical contractor, for alternative factors on motors and air conditioning. That person assumes responsibility for any malfunction or nuisance outage that results. The measured data should be retained with the calculation.
Sources
- Electrical Engineering Portal: Demand, diversity, utilization and load factors
- Journal of Advances in Applied and Fundamental Research: building load standards
- ElecDatum: demand factors by load type
- ECT: fundamentals of smart metering
- IAEI Magazine: calculated, demand and demonstrated loads in the CE Code
- ESA Bulletin 8-3-16: maximum circuit loading and demand factors
- ESA Bulletin 86-1-7: electric vehicle charging systems
- Government of British Columbia: strata planning reports guidance
- Transport Canada: TP 127 Ships Electrical Standards