Commercial Building Energy Consumption

Commercial Building Energy Consumption

Commercial building energy consumption constitutes a major fixed expense for most businesses. But where do commercial property owners spend most of their energy? 

In this blog, we explore average building energy consumption, where the most energy is spent, and the opportunities for commercial operators to reduce energy usage by implementing energy efficiency upgrades.

How Much Energy Is Used in U.S. Buildings?

average building energy consumption

In 2021, the US Energy Information Administration (EIA) concluded the four major sectors that consume the most energy (by end-use) with a total energy consumption of 73.5 quadrillions Btu. 

  • Transportation 26.9 quads (37%)
  • Industrial 25.9 quads (35%)
  • Residential 11.6 (16%)
  • Commercial 9.1 (12%)

The total energy expenditures of buildings in the U.S. reached $142 billion at $23,900 per building and $1.47 energy use per square foot.

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Building Energy Consumption Breakdown

Residential buildings consumed 11.6 quadrillions Btu of energy, with the following types being the most used in 2021: 

  • Natural gas – 42%
  • Petroleum – 8%
  • Renewable energy sources (geothermal energy, solar energy, and wood fuels) – 7%

Whereas commercial buildings consumed 9.1 quads with electricity and natural being the primary types of energy used: 

  • Electricity – 38%
  • Natural gas – 61%

It is also important to note that the building energy requirements stated above include not only the end-use consumption but also the energy losses brought about by the inefficient use of energy. The residential and commercial sectors ended with a combined energy consumption of 39% of total U.S. energy consumption in the U.S. in 2021.

Commercial Building Energy Consumption by Industry

The EIA reports the commercial building energy consumption breakdown and identifies the five types of commercial buildings that use the most energy (ranked by the % of total energy consumed by commercial buildings they use). 

  • Mercantile and service warehouse (15%)
  • Office buildings (14%)
  • Education building (10%) 
  • Health care facilities (8%)
  • Lodging (6%)

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How Buildings Rely on Energy

The Department of Energy pegs that a commercial building consumes an average of 22.5 kilowatt-hours (KWh) per square foot of floor space. Usage can be further broken down to see which aspects of a commercial building use the most energy: 

  • 8 KWh/sq ft for refrigeration and equipment
  • 7 KWh/sq ft for lighting
  • 3 KWh/sq ft for cooling
  • 2 KWh/sq ft for heating
  • 2 KWh/sq ft for ventilation
  • 0.5 KWh/sq ft for hot water heating

Of course, while this can give you an image of how commercial buildings consume energy on a regular basis, it’s worth noting that these averages can vary based on a handful of different factors. The location, overall size, and even the industry served by the commercial building all impact into its overall consumption. 

Although total energy usage has reduced 12% per total floor space from 2012 to 2018, there has been a tremendous push to improve energy efficiency of commercial buildings in recent years. 

Commercial operators (REITS) have started setting ambitious net zero targets to prevent buildings from becoming “financially obsolete” and make portfolios more sustainable. The Inflation Reduction Act of 2022, too, provides incentives for reducing emissions, specifically energy efficient commercial buildings.

How to Calculate Your Building’s Energy Consumption

Knowing how much energy a building consumes is the start of an effective and efficient energy management strategy. 

Real estate portfolio management platforms often rely on energy usage intensity (EUI) as a key energy efficiency metric. Essentially, it describes a building’s energy consumption compared to its size and other characteristics.

A lower EUI denotes energy efficiency. The higher the EUI, the more energy intensive the building is. The EUI indicates the purpose for which the building was created. For example, healthcare and assisted living buildings, which use medical devices, air conditioning systems, heat pumps, etc., obviously have higher energy consumption than convenience stores

This detail is important in building energy consumption benchmarks, which help assess opportunities and identify ways to save energy. Knowing your benchmarks is the first step to energy efficiency

In calculating the EUI, divide the total energy consumed by the building in one year (measured in kBtu or GJ) by the total gross floor area of the building in square feet.

kBTU = EUI
Gross Square Feet 

Once you know your EUI, you can compare your building against national benchmarks, similar buildings, and better evaluate efficiency strategies.

Energy Efficiency and Its Importance

Energy consumption in the U.S. is expected to continue to rise from 2021 to 2050. Because of this, the U.S. government is heavily investing in sustainable energy production. The U.S. Department of Energy is urgingurges the commercial building sector to take action to improve its energy efficiency.

Reducing energy consumption in a building is both a challenge and an opportunity for developers and business owners. Aside from helping the environment, energy efficiency and green alternatives also cut down on their operational expenses and, depending on the industry or application, can even attract new customers.

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Developers, as well as business owners and building operators, can plan and execute sustainability efforts and reduce the amount of energy consumed by commercial buildings. Energy efficiency brings benefits, such as the following:

  1. Lower energy consumption costs—electricity, heating, water, etc
  2. Reduce losses from operational inefficiencies, such as heat loss  through inadequate insulation
  3. Qualification for renewable energy tax credits
  4. Generating interest for environmentally conscious customers
  5. Extended lifespan for electrical and heating equipment

Energy efficiency is a steady, long-term solution for cutting down on a business’s operational costs. On top of lower utility bills, companies with sustainability projects make their energy demand more manageable, attract opportunities from environmentally conscious partners, and allot their energy savings toward other expenditures. 

Energy efficiency is a win-win solution. And this is the indelible print that you want to leave behind.

Despite its importance, energy conservation is easier said than done. The tasks required to reach your energy-efficiency goals can be tedious and need a considerable amount of time and capital. Luckily, you can circumvent these issues by partnering with an energy-efficiency-as-a-service company.

Here’s How We Help Commercial Buildings Reduce Energy Consumption

U.S. buildings generally require high levels of energy on a regular basis—but there’s something you can do about it.

Energy management solutions are available. Budderfly, for one, is an innovative energy-efficiency-as-a-service provider that unlocks energy savings, but more importantly, unlocks growth. We’ve already helped over 3,000 business locations across the U.S.:

  • Reduce energy usage up to 30%
  • Get new, energy-efficient equipment with ZERO cost
  • Eliminate the risk of getting energy efficiency upgrades
  • Provide insight into how you can save electricity

Call Budderfly now for a win-win energy revolution that creates the biggest impact on your business and the environment.