Load factor represents the ratio of average load to peak load over a specified time period. It is derived by dividing the total energy consumed or demand served during the period by the product of the peak demand and the duration of the period. For example, if a facility consumes 12,000 kWh of electricity in a month (720 hours) and its peak demand was 50 kW, the load factor is (12,000 kWh) / (50 kW * 720 hours), or 0.333 (33.3%).
This metric offers a valuable insight into the efficiency of resource utilization. A higher value generally indicates more consistent usage, which can lead to reduced operating costs and improved system performance. Historically, understanding and optimizing this relationship has been crucial for utilities and organizations managing infrastructure to ensure reliable and cost-effective service delivery.