How Much Electricity Does a Commercial Building Use?
Commercial building energy consumption varies by the type of commercial real estate and square footage.
According to the EIA Commercial Buildings Energy Consumption Survey:
- Warehouse & Storage: 90,000 kWh annually (based on 13,700 square feet)
- Retail/Big Box: 189,000 kWh annually (based on 13,500 square feet)
- Office Building: 271,000 kWh annually (based on 16,000 square feet)
But no matter what kind of commercial real estate property you have, the electricity rate you pay and the amount of kWh used makes a difference in your bottom line.
Electricity Considerations for Commercial Real Estate
The electricity bill for your commercial real estate building will be a function of your electricity usage and how much you pay for that electricity. If you are in a deregulated electricity market, you can shop for the best electricity rate for your commercial building.
Here are some of the other factors that will impact your electricity rate in commercial real estate.
Energy efficiency can play a big role in cutting your electricity usage.
ESG strategy development is a big part of this sector. Many corporations are interested in sustainability strategies. Having a sustainable building can attract higher rents.
Green leases are also becoming increasingly popular, where tenants and owners share the cost of energy efficiency improvements.
Warehouses & Storage
Warehouse commercial property owners will have varying electricity usage levels depending on the type of tenants they rent to.
The type of tenant you have can have a big impact on your electricity demand charges for your commercial warehouse.
So not only do you need to get the lowest electricity rate per kWh, you need to control and manage your demand charges to keep costs in check.
If your commercial real estate is retail space, your challenges are very different.
You’re handling electricity for your retail center’s common areas and parking. You’re dealing with meters for each storefront and having electricity returned to your control with a move-out.
If you’re a big box retailer, you’re dealing with budgeting, benchmarking and multi-state portfolio management.
Average Electricity Usage for Commercial Real Estate (kWh per square foot)
The EIA Commercial Buildings Energy Consumption Survey is a good starting point to evaluate how much electricity a commercial building uses. Commercial building energy use will vary, but this can help you estimate your utilities cost per square foot.
|Type of Building||Electricity Usage per Square Foot|
|Retail Store||15.4 kWh/sq foot|
|Car Dealership||14 kWh/sq foot|
|Strip Shopping Center||21.7 kWh/sq foot|
|Professional Office Building||16.9 kWh/sq foot|
|Warehouse (unrefrigerated)||6.6 kWh/sq foot|
|Warehouse (refrigerated)||28.8 kWh/sq foot|
|Distribution Center||5.4 kWh/sq foot|
|Self Storage Units||4.6 kWh/sq foot|
Benchmarking can also help you evaluate your office building’s energy efficiency and electricity usage. You can benchmark your commercial building’s electricity usage with the EnergyStar Portfolio Manager tool.
When you are in a deregulated electricity market, you can also cut your electricity bill by shopping for the best electricity rate for your commercial building.
According to the Department of Energy, large office buildings (those with more than 100,000 square feet) use an average of 20 kilowatt-hours (kWh) of electricity per square foot and 24 cubic feet of natural gas per square foot annually.
The average commercial electricity rate in the US 11.33 cents per kWh (EIA November 2021).
That makes the average monthly electricity bill for a 100,000 square foot office building around $19,000.
How to Reduce Electricity Usage in a Commercial Office Building
To cut your operating costs, you need to get the best electricity rate for your commercial real estate property. And reduce your usage by focusing on these items:
- Energy Audit. Invest in an energy audit to understand your current consumption and find efficiency opportunities.
- Demand. Coincident peak management, lowering your demand when overall demand systemwide is at its highest, can lower your bill for the next year.
- HVAC. HVAC can account for over 30% of your electricity bill in CRE. Implement controls around the building to avoid the system becoming unbalanced.
- Lighting. Lighting accounts for around 17% of the electricity usage in an office building. Replace discolored lighting fixtures to increase lighting output by up to 10%.
- Appliances. Appliances can add to your total kWh usage. For example, a single 2-burner coffee maker can use almost 400 kWh a month.
- Space Heaters. Space heaters can each add $20-$25 to your electricity bill per month, per heater.
Our energy experts have worked with owners and operators of commercial office buildings, residential high-rise properties, large urban centers, investment properties, REITs and more. Talk to us about your challenges. We’ll help you find solutions.