There are approximately 5.6 million commercial buildings within the United States. As you can imagine, each of these buildings consume electricity to some degree, and in some way, shape or form. Regardless of industry, it’s important for business owners to understand their options when it comes to electric rates and plans, particularly those in deregulated markets.
Business & Commercial Buildings
Schools & School Districts
Salons & Barbershops
The Energy Information Administration (EIA) defines business buildings as commercial buildings. In order for a building to be classified as commercial, more than 50% of its square footage must be used for business activities. Based on this definition, commercial buildings can include:
- Government Buildings (excluding military bases or reservations)
The EIA defines this energy sector as the ‘commercial sector’. Many organizations or businesses can be classified under or within the commercial sector including:
- State, Federal & Local Government
- Sewage Treatment Facilities
- Fraternal, Social or Religious Groups
Common consumption sources for electricity within the commercial sector including:
- Water Heating
- Space Heating
- Air Conditioning
- Other Related Equipment
- Electric Generators
Electricity for Businesses By State
Many states in America have a significant number of commercial buildings, all of which require and consume a significant amount of energy. Some of these states commercial consumption (by percentage for 2014) include:
- Texas: 12.7%
- Ohio: 18.6%
- Pennsylvania: 26.7%
- Connecticut: 24.4%
- Delaware: 20.9%
- Illinois: 20.3%
- New York: 30.3%
- Maine: 15.3%
- Maryland: 30.3%
- Michigan: 21.7%
- Oregon: 19.2%
- Massachusetts: 27.4%
- New Hampshire: 22.8%
- New Jersey: 26.6%
In many areas of the United States, commercial owners have the option to choose who supplies their electricity. These states or areas within the state are energy deregulated, which provides a lot more flexibility in rates, plans and technologies. Researching energy deregulation in your state will help you to determine the best option for your business and buildings.
Quick Stats on Electricity Use in Businesses
- There are almost 5 million commercial buildings in the US.
- Electricity represented only 38% of the energy used by businesses in 1979. As of 2003 it was 55% and this number is still climbing today.
- Businesses in the South use the most energy, followed by the Midwest, the Northeast, and then finally the West. Southern businesses spend around $40 billion a year on electricity.
- Use of CFLs and halogen lights in businesses have increased over the years as a cost-saving measure, while the use of incandescent lights have dropped steadily.
- Less than 1% of businesses occupy buildings larger than 200,000, yet these businesses represent 25% of energy consumption for all businesses.
- The cost of electricity depends on the size of the commercial building or business. On average Micro Businesses are companies that consume between 5,000 kWh to 15,000 kWh, Small Businesses are companies that use between 15,000 kWh to 25,000 kWh and Medium Businesses are companies that consume between 30,000 kWh to 50,000 kWh.
- Large Businesses are companies that consume a minimum of 100,000 kWh. Their electricity supply and rates are typically handled a little bit differently than the other business classification types.
- Slightly below one-fifth of the United States total energy consumption comes from commercial buildings.
- Space heating and cooling, and lighting are the top three sources of electricity consumption in the commercial sector.
- Energy prices are expected to remain stable through to 2035, while commercial building floor area or square feet is expected to grow at a slower rate.
FAQ on Business Electricity
What makes up most of a business’ electricity bill?
Overall, half of business electricity bills are made up of heating and lighting. Aside from heating and lighting, on average 8% of a businesses electric bill comes from air conditioning, 8% from water heating, 7% from ventilation, 6% refrigeration, 3% computers/office equipment, and 3% cooking. Many usually find it difficult to believe that only 3% of a business’ electricity bill comes from technology, but that’s simply a testament to how efficient computers, printers, copiers, etc. have become over the past couple of decades.
Which types of businesses use the most energy?
As we mentioned before, the term “commercial” building can encompass a variety of buildings with different purposes. The top five types of commercial buildings use a little less than two-thirds of energy consumed by all commercial buildings.
Out of the different types of commercial buildings, retail and service buildings use the most energy — they use 20% of all energy consumed by all commercial buildings. Office buildings come in next at 17% of all consumption, followed by education (13%), health care (9%), and lodging (8% of consumption).
What are Energy Choice Programs?
States that are energy deregulated will typically offer energy choice programs or have energy choice organizations (like Electric Choice) that will help businesses to find an energy supplier. It is important to find the energy supplier that best suits the business needs, as in the long run; they can save a company money, time and more.