How to Reduce Energy Costs in Commercial Buildings
Energy costs represent one of the largest controllable expenses in commercial real estate. With utility rates rising and sustainability goals becoming more pressing, property managers need effective strategies to reduce consumption without compromising tenant comfort.
The Hidden Cost of Energy Inefficiency
Most commercial buildings waste 20-30% of their energy through inefficient systems, poor scheduling, and lack of visibility into consumption patterns. For a 100,000 sq ft office building, this can mean $50,000-$75,000 in unnecessary annual costs.
5 Proven Strategies to Cut Energy Costs
1. Optimize HVAC Scheduling
Your HVAC system likely accounts for 40% of your building’s energy use. Simple scheduling adjustments can yield immediate savings:
- Implement setback temperatures during unoccupied hours
- Use occupancy sensors to adjust conditioning in real-time
- Regular maintenance ensures systems run at peak efficiency
Potential Savings: 10-15% reduction in HVAC costs
2. Upgrade to LED Lighting
If you haven’t already made the switch, LED retrofits offer one of the fastest paybacks:
- 75% less energy consumption than incandescent
- 10-25 year lifespan reduces maintenance costs
- Better light quality improves tenant satisfaction
Potential Savings: $3-5 per square foot annually
3. Monitor Peak Demand Charges
Many property managers overlook demand charges, which can represent 30-70% of your electric bill:
- Identify peak usage patterns in your building
- Stagger equipment startup times to avoid spikes
- Consider battery storage for peak shaving
Potential Savings: 15-25% reduction in demand charges
4. Implement Smart Building Controls
Modern building automation systems (BAS) provide granular control and insights:
- Real-time monitoring identifies waste immediately
- Automated responses to occupancy and weather
- Remote management capabilities
ROI: Typically 1-3 years with 20-30% energy reduction
5. Engage Tenants in Energy Conservation
Your tenants control a significant portion of energy use:
- Share monthly consumption data to create awareness
- Implement green lease clauses that incentivize conservation
- Recognize top performers to encourage participation
Real-World Success Story
A 250,000 sq ft office complex in Chicago implemented these strategies and achieved:
- 27% reduction in total energy costs
- $185,000 annual savings
- 6-month payback on efficiency investments
- 15% increase in tenant satisfaction scores
Getting Started with Energy Management
The key to successful energy management is visibility. You can’t manage what you don’t measure. Start by:
- Benchmarking current consumption against similar buildings
- Identifying the biggest opportunities through energy audits
- Implementing changes systematically with measured results
- Continuously monitoring to maintain savings
How Voltly Can Help
Voltly’s platform automatically tracks your utility consumption, identifies savings opportunities, and provides actionable insights. With features like:
- Automated bill collection and parsing
- Real-time anomaly detection
- Portfolio-wide benchmarking
- Budget tracking and forecasting
Property managers using Voltly typically identify 15-20% in potential savings within the first month.
Waleed Barakat is the CEO & Co-founder of Voltly with extensive experience in helping commercial properties optimize their energy consumption and reduce costs.