**A load factor is calculated with the following formula: Load Factor = Month's kWh Usage / (Peak Demand or KW x 730).** A load factor is simply the energy load on a system compared to its maximum potential or peak load for a period of time.

A load factor is usually calculated on a monthly or annual basis. A person will likely use the average amount of energy throughout the year, for instance, but then he will have times when he uses more or less of that energy. When the energy used is at its highest levels during the month and compared to the usage over the course of the same month, that is a load factor.

A load factor is easy to determine with the correct information on hand. A person needs to know the kWh that was used during the month and the peak usage during the month in order to complete the formula. When ready to determine the load factor, he should take the month's kWh usage and divide it by the peak demand, which is the KW times 730 for a month. When working out the formula based on an annual check, instead of using 730 in the formula, 8,760 should be used.