Manage Energy in Commercial Buildings
Environmental Defense Fund and U.S. Green Building Council California
Reducing emissions from building operations is both a business and climate imperative. By optimizing energy use in commercial buildings through options such as HVAC and lighting upgrades, advanced energy management systems, and renewable energy integration, your company can reduce emissions while lowering operating costs.
The operations of buildings account for 26% of global energy-related emissions, with 8% being direct emissions in buildings and 18% indirect emissions from the generation of electricity and heat they consume.1 In the U.S., direct and indirect greenhouse gas (GHG) emissions from commercial and residential buildings account for 31% of total U.S. GHG emissions.2
Commercial buildings come in all shapes and sizes, from office buildings to hospitals to hotels. Each type of building uses energy in different ways, so it’s important to design specific energy management strategies based on your industry and building needs. For example, office buildings use a lot of energy for air conditioning and lighting, while hotels need to heat water and keep guests comfortable.
Energy intensity, which is defined as energy used per square foot of space, is used to measure the efficiency of buildings. According to the latest Commercial Building Energy Consumption Survey by the U.S. Energy Information Administration, food service buildings, food sales buildings, and inpatient healthcare buildings use the most energy, while vacant buildings, warehouses, and religious buildings use the least.3
Sources of Energy Consumption in Commercial Buildings
The main sources of energy consumption in commercial buildings include heating, cooling, ventilation, water heating, refrigeration, lighting, cooking, office equipment, and computing. According to the latest Commercial Building Energy Consumption Survey by the U.S. Energy Information Administration, about 32% of building energy consumption was for heating. Ventilation and lighting are other significant sources of energy consumption, each accounting for 10% or more of total energy consumption.3
An energy audit is a thorough review of a building’s energy usage and can help you pinpoint key areas where your company can make improvements. An energy audit helps identify areas of energy waste and provides recommendations for energy-saving measures. The audit can identify opportunities such as lighting improvements, heating system repairs, and process changes to reduce energy usage. For example, a building’s heating and cooling system could be inefficient, and upgrading to a newer, more efficient model could result in cost savings.
Implementation Roadmap: Emissions Reduction Levers
This section is contributed by the U.S. Green Building Council California (USGBC CA), which is driving the transition toward sustainable, healthy, resilient, and equitable buildings and communities for all. The roadmap and emissions reduction levers are informed by USGBC CA’s extensive network of green building professionals, the success of LEED-certified projects across the state, and emerging best practices from member companies participating in its Net Zero Accelerator program. These strategies provide both environmental benefits and financial returns, representing “no-regrets” investments for your company. For a deeper dive, check out the full report, which also includes key performance indicators (KPIs) to measure success.
Phase 1: Quick Wins
- LED Lighting Upgrades with Smart Controls: Lighting is a significant source of energy consumption in commercial buildings. Some examples to optimize lightening in commercial buildings include switching to LED lighting and implementing daylight harvesting and occupancy sensors that can reduce energy consumption while maintaining lighting quality. Daylight harvesting systems can automatically adjust artificial lighting to complement natural light, reducing the amount of energy used by lighting fixtures. Occupancy sensors can detect when a room is empty and turn off lights automatically.
- HVAC Commissioning and Optimization: The HVAC system is the largest consumer of energy in most commercial buildings. Optimizing and, if required, upgrading HVAC systems can significantly reduce energy consumption. Replacing older systems with high-efficiency equipment and implementing control strategies such as demand-controlled ventilation and night setbacks can lead to significant savings. Proper maintenance, including regular filter changes and equipment cleaning, can also help maintain optimal system efficiency.
- Water Efficiency Measures: Water efficiency directly reduces energy consumption through decreased pumping, treatment, and heating requirements. Potential solutions to improve water management include creative financing models, cross-sector partnerships, behavior change strategies, and scalable innovations—all of which are essential for implementing the following high-impact measures: Low-flow fixtures and smart irrigation systems, greywater recycling for landscape irrigation, and rainwater harvesting systems.
- Energy Management System Installation: Energy management systems can track energy consumption and identify areas for improvement. These systems can monitor HVAC systems, lighting, and plug loads, providing real-time data on energy consumption. You can then use this data to identify trends and patterns in energy consumption, thus enabling informed decisions on energy-saving measures.
Phase 2: Strategic Investments
- Building Envelope Improvements: Strategic envelope upgrades—particularly window films, improved insulation, and air sealing—provide consistent energy savings while improving occupant comfort. Priority Interventions: Window film application for solar heat gain control, roof insulation upgrades (especially for flat commercial roofs), and air sealing of penetrations and building connections
- On-site Solar Installation: Incorporating renewable energy sources such as solar panels and wind turbines can significantly reduce your company’s external energy consumption and operating costs. Solar panels can provide electricity for lighting and plug loads, while wind turbines can provide energy for HVAC systems. The feasibility of renewable energy depends on each building’s location, energy needs, and available resources. Solar installations often provide the single largest emission reduction opportunity for building owners. Optimization strategies: Couple with battery storage for demand charge management, consider solar canopies over parking areas, and evaluate community solar options for constrained sites. Check out our action step on how to Invest in On-Site Renewable Energy for further guidance.
- Smart Building Technology Integration: Internet of Things (IoT) sensors and smart building platforms enable granular monitoring and automated responses that optimize building performance in real time. Implementation focus: Occupancy-based lighting and HVAC control, indoor air quality monitoring and response, and predictive maintenance for critical systems
- Electrification of Building Systems: Transitioning from natural gas to electric systems—particularly heat pumps for space and water heating—eliminates on-site combustion emissions. Strategic approach: Prioritize heat pump water heaters (fastest payback), consider heat pump space heating during HVAC replacement cycles, and evaluate induction cooking in commercial kitchens.
Phase 3: Advanced Optimization
- Cool Roof Implementation During Re-Roofing Cycles: Cool roofs and strategic landscaping reduce building cooling loads while contributing to community-wide urban heat island reduction. Effective strategies: Cool roof membranes and coatings, green roofs for additional insulation and stormwater management, and strategic tree planting for summer shading
- Waste Heat Recovery System Installation: Capturing and reusing waste heat from data centers, commercial kitchens, and industrial processes can significantly reduce overall building energy consumption. This strategy is particularly valuable for mixed-use developments and facilities with consistent heat generation.