This paper provides a method for determining the economic incentives and limitations for a battery used for peak clipping, with the goal of finding an optimal mix between the battery’s power density and energy density. A ratio called the R-factor has been introduced, which helps determine the energy demand to curb the peak. The paper’s results embrace different investment scenarios showing what battery capacity can be expected, dependent on interest rates, payback time and potential savings in power tariffs due to curtailment. In addition, the paper introduces the “wrench and cut” concept, which can help improve the investment case for batteries by combining battery operations with standard demand response operations. In particular, the effect of using a limited form of demand response-based load deactivation together with a battery has been analyzed. The investigation provided raises a point that battery degradation must be taken into account to prevent the reduction of battery life and possibly the needed payback period. The ultimate target of the presented research refers to vehicle-to-grid/vehicle-to-building developments in the Arctic region, where a vehicle is considered a mobile battery and where flexibility can be delivered in a cost-efficient way.