With energy prices fluctuating and the global energy market facing ongoing volatility, it’s more important than ever to prioritize energy cost reduction strategies. Here are the top 50 ways to reduce business energy costs in 2025 and beyond.
How To Reduce Energy Costs For Small & Large Businesses
The United States Small Business Administration estimates that 40% of business expenses can be attributed to energy costs. As a business owner, finding ways to reduce energy costs in business is a constant pursuit. Whether you operate a small business or a large enterprise, you can implement simple and effective energy-saving solutions to lower costs and increase profitability.
In this article, we outline 50 tips to reduce energy consumption at your business. But first, let’s look at the top ten ways to cut costs.
Top 50 Energy-Saving Tips for Businesses in 2025
1. Pay Attention To Your Equipment
Ensure that all equipment, such as computers, printers, lighting, and other devices, are Energy Star-rated for energy efficiency. Set eligible equipment to sleep mode after business hours or connect them to power strips that can be turned off with a single switch. Installing smart thermostats and LED lighting can also substantially reduce energy costs. In frequently unoccupied areas like bathrooms and conference rooms, install motion sensors to automatically control lighting.
2. Educate Your Employees
Encouraging employees to adopt simple energy-saving initiatives in the workplace can lead to meaningful reductions in energy consumption. For instance, turning off lights when leaving rooms and adjusting thermostats to optimal settings can save energy. Appoint an employee to lead the charge in promoting energy awareness, ensuring that devices such as communal coffee pots or phone chargers are unplugged when not in use. These collective efforts can significantly reduce small business energy costs.
3. Pay Less For Electricity
If your business is located in a deregulated energy market, you can shop around for energy providers to find the most cost-effective rates. Switching to a lower-cost provider is a simple process, and the potential savings can be significant. Learn more about energy deregulation and how to take advantage of it.
4. Take a Peek at Your Peak Demand
Understanding your peak energy demand is essential in reducing business electricity savings. Utilities often charge higher rates during periods of peak demand. By scheduling energy-intensive operations during off-peak hours or staggering equipment start times, you can level out energy usage and reduce costs. Additionally, businesses can install on-site generators to alleviate demand spikes.
5. Take Advantage of Free Energy Audits
Most utility companies offer free energy audits that can identify inefficiencies in your energy usage. These audits provide valuable insights into areas where you can cut down on consumption, such as upgrading to more efficient lighting or participating in demand response programs. Many utilities will also recommend upgrades such as installing LED lighting or improving insulation.
6. Consider A Hybrid Energy Contract
Larger businesses can take advantage of hybrid energy contracts, which allow for lower off-peak pricing. By locking in fixed rates for peak hours and utilizing off-peak pricing, businesses can achieve significant energy cost reductions. Learn how energy brokers can help secure favorable contracts that align with your business needs.
7. Utility Bill Auditing as a Cost-Saving Strategy
A utility bill audit can uncover errors or discrepancies in your billing, potentially leading to refunds and long-term savings. For example, if your business is tax-exempt but has been paying sales tax on energy, a thorough audit could result in a significant refund. Utility bill auditing is an easy way to ensure you’re not overpaying for energy.
8. Switch To A Cheaper Distribution Rate
Many businesses are unaware that they may qualify for a more affordable distribution rate for energy delivery. Contact your local utility to check whether your business qualifies for a lower delivery rate schedule. Energy brokers can assist in navigating this process and optimizing your rate plan.
9. Explore Alternative Fuels
In areas where natural gas is available, switching from electricity to gas for certain operations, such as heating, can lower costs. Some utilities even offer incentives to businesses for switching to alternative fuels, so it’s worth contacting your local provider to explore these options. If natural gas pipelines are unavailable in your area, consider investing in renewable energy sources such as solar power.
10. Hire An Energy Broker To Watch The Market
With energy markets becoming more volatile, hiring an energy broker can be a strategic move for your business. Brokers monitor energy market fluctuations and can help you lock in favorable energy rates when market conditions are advantageous. Understanding energy market trends is key to saving money.
11. Measure Your Usage
Tracking energy usage is essential to create a strategy for energy cost reduction. Energy technology solutions can provide real-time data that helps you identify usage inefficiencies and allows you to implement cost-saving measures.
12. Negotiate With Your Supplier
Businesses in deregulated energy markets have the option to negotiate for better rates. Tools like blend-and-extend contracts can help you reduce costs when market prices drop.
13. Switch Energy Suppliers
Make sure to vet your energy supplier carefully to avoid hidden fees or unethical practices. Switching energy suppliers can be complex and needs to be carefully addressed. Evaluating energy supplier price vs reputation is key to ensuring success with your energy procurement strategy.
14. Enroll In A Demand Response Program
Demand response programs incentivize businesses to reduce consumption during peak periods, which helps to lower energy costs while generating revenue.
15. Install Energy Storage
Adding energy storage systems like batteries allows businesses to store excess energy generated during off-peak times and use it during peak hours, saving costs on both electricity and demand charges.
16. Pay Attention To Energy Prices
Monitoring the future trend of energy prices in 2025 can help your business make strategic decisions about energy procurement and contract renewals. Check out our Energy Prices 2025 forecast for more insights.
17. Dissect Your Energy Bill
Understanding the anatomy of your energy bill is essential. Review it monthly to spot any errors or discrepancies. Utility bills can often contain errors and are simply paid by customers without thinking. A utility bill audit is a great way to ensure that your bills are accurate.
18. Consider Global Events
International events, such as the ongoing volatility in European energy markets, can impact U.S. energy prices. Stay updated with global energy trends to anticipate changes.
19. Shop For Lower Natural Gas Rates
The natural gas market has seen fluctuations due to geopolitical factors. Now is a great time to lock in favorable gas rates. Shopping for natural gas is a complex process and it’s best to consult with a gas expert for guidance.
20. Install Smart Meters
Smart meters allow businesses to monitor energy usage in real-time, helping to make informed decisions about reducing consumption. Many utility companies across the country are replacing analog meters with smart meters. Call your local utility to see if you have a smart meter at your business. Logging into the online portal can provide you with key insights into your energy usage.
21. Inspect Your Energy Tariffs
Energy tariffs determine how utilities charge for the delivery of electricity or gas to your business. Often, businesses overlook tariff structures, leading to unnecessary charges. Tariffs can vary based on the size of your business, peak demand times, or specific location. It’s crucial to regularly review your utility bills to ensure you are on the most cost-effective tariff. In some cases, you may be able to switch to a cheaper tariff that better suits your energy usage patterns. This step is especially important if your energy consumption has changed significantly over time. Consulting with an energy broker to assess whether you are eligible for a lower tariff can lead to substantial savings.
22. Calculate Your Business Energy Consumption
Understanding how much energy your business consumes is key to reducing costs. Calculating energy consumption involves tracking kilowatt-hours (kWh) used during different periods, such as during peak versus off-peak hours. Analyzing this data can help you identify inefficient equipment or practices. For example, significant outliers in your energy usage charts could reveal faulty HVAC systems or lights that are left on unnecessarily. By measuring energy usage accurately, you can implement targeted improvements that directly lower your business energy costs. Utilize energy management software or hire a consultant to monitor consumption and create a tailored energy reduction strategy.
23. Avoid Energy Scams
Energy scams, like slamming (when a business is switched to a new supplier without consent) or unauthorized charges, can cost companies thousands of dollars. Be vigilant about reviewing contracts and monitoring your bills for unexpected rate hikes or fees. Be cautious when dealing with energy suppliers, especially in deregulated markets where third-party suppliers can engage in deceptive practices. Ensure that any contracts are signed with reputable, vetted providers. If you suspect fraudulent activity, report it to the appropriate regulatory body immediately. Always work with an energy broker to avoid common pitfalls and to ensure you are getting the best deal.
24. Be On The Lookout For Hidden Charges
Hidden charges can sneak into your energy bills, inflating your costs without you realizing it. These charges often stem from complex tariff structures, late fees, or undisclosed delivery charges. Utility companies can also add surcharges related to grid maintenance or transmission fees that aren’t always immediately clear. Scrutinize every line item in your bill to catch hidden charges. If you find something unusual, consult with your utility or energy supplier. Consider hiring a utility bill auditing service to uncover any discrepancies or overcharges and ensure you’re paying only what you owe.
25. Renew Your Supply Contract At A Lower Rate
Renewing your energy supply contract at the right time can help you secure lower rates and protect your business from future price hikes. Energy markets can fluctuate based on supply, demand, and geopolitical factors. By working with an energy broker, you can track market trends and renew your contract when prices are low. For example, if energy prices are expected to rise in 2025, renewing your contract early could lock in favorable rates, providing long-term savings. Be sure to start the renewal process well before your current contract expires to avoid higher out-of-contract rates.
26. Take Advantage Of Contract Rescission Periods
Many states allow businesses to cancel an energy supply contract within a specific rescission period, typically a few business days after signing. This can be a valuable tool if market conditions change suddenly and better rates become available. Keep an eye on the energy markets after signing a contract and use this period to renegotiate or cancel if necessary. Understanding your state’s energy regulations regarding rescission can help you make informed decisions and potentially save on business energy costs.
27. Adhere To Material Change Clauses
If your business experiences a significant change in energy usage, such as scaling operations or moving locations, it’s critical to refer to the material change clause in your energy contract. Failing to inform your supplier of major changes could result in penalties or higher rates. Material change clauses protect both the supplier and the consumer by ensuring the contract reflects actual energy usage. Proactively communicating with your supplier if your energy needs change can help you avoid extra costs and ensure a seamless transition.
28. Learn What To Do When Buying A Business
When acquiring another business, it’s essential to review the existing energy contracts that come with the purchase. If the business has a favorable rate locked in, you may be able to assume the contract, saving money compared to current market rates. Conversely, if the contract has unfavorable terms, you may want to renegotiate or terminate it before finalizing the purchase. This is particularly relevant in deregulated states, where you have more options for suppliers. Consulting with an energy advisor can help you assess whether assuming the existing contract or entering into a new one will provide better savings.
29. Learn What To Do When Relocating
If your business is relocating within the same utility footprint, it’s critical to transfer any existing energy supply contracts to avoid cancellation fees or being placed on a higher default rate. Utilities may charge penalties for early termination, so transferring your contract to the new location can prevent unnecessary expenses. Be sure to contact your supplier well in advance of the move to ensure a smooth transition and to review the rates for the new location. Energy brokers can help you navigate the process and avoid costly mistakes.
30. Avoid Early Termination Penalties
Most energy contracts include early termination clauses that impose penalties if the contract is canceled before the agreed-upon end date. These fees can be substantial and can quickly erode any potential savings from switching suppliers prematurely. Before terminating a contract, review the terms carefully and explore alternative options, such as negotiating new terms or transferring the contract. Energy brokers can assist in identifying opportunities to reduce these penalties or negotiate a more favorable contract extension.
31. Fix vs. Float: Decide What’s Best For You
Choosing between fixed and floating energy rates is a key decision that can impact your energy costs. Fixed rates provide price stability by locking in rates for the duration of the contract, making them ideal for businesses that prefer predictable energy expenses. Floating rates, on the other hand, track market fluctuations, which can offer savings during periods of low market prices but expose businesses to price volatility. Assess your business’s risk tolerance and energy needs to determine the best option. Consulting with an energy broker can help you decide the best strategy based on current energy market trends.
32. Long vs. Short Term Energy Contracts
When entering into an energy contract, deciding between long-term or short-term agreements is crucial. Long-term contracts often lock in rates for several years, providing stability but potentially missing out on lower future rates. Short-term contracts allow for more flexibility and can be advantageous when market prices are expected to fall. Each option has its advantages, and the best choice depends on market conditions and your business’s long-term energy strategy. Working with an energy broker can help you make an informed decision and avoid costly mistakes.
33. Avoid Energy Buying Mistakes
Common energy buying mistakes include not reading the fine print of your energy contract, failing to monitor market trends, or entering into contracts without professional advice. These errors can result in overpaying for energy or getting locked into unfavorable terms. Avoid these pitfalls by reviewing contracts carefully and considering professional advice from energy consultants. They can help you navigate the complexities of energy contracts and make informed purchasing decisions.
34. Implement An Energy Incentive Program
An energy incentive program encourages employees to adopt energy-saving practices by offering rewards for achieving energy reduction goals. This can be as simple as recognizing departments for reducing HVAC usage or giving bonuses for overall energy consumption reductions. Engaging employees in energy-saving initiatives can create a company-wide culture of sustainability, leading to lower energy costs and a smaller carbon footprint.
35. Check Sales Tax Exemptions
Some businesses may qualify for sales tax exemptions on energy consumption. For example, non-profit organizations or manufacturers in certain states may not be required to pay sales tax on energy bills. Check your state’s tax laws to see if your business qualifies for an exemption, and if it does, ensure that the exemption is reflected on your energy invoices. Filing for sales tax exemptions can lead to significant savings over time.
36. Measure Reactive Power (KVA or KVar)
Reactive power refers to the portion of electricity that is not used effectively by your business’s electrical systems, and it can cause inefficiencies that result in higher energy costs. Some utility companies impose additional charges for reactive power (measured in KVA or KVar) because it reduces the overall efficiency of the grid. To minimize these costs, businesses can install power factor correction equipment like capacitors, which reduce the amount of reactive power your business uses. Monitoring and managing your reactive power can result in lower utility bills and improved energy efficiency.
37. Avoid Wasting Energy
A simple but often overlooked way to cut costs is to avoid unnecessary energy waste. Make sure that lights, computers, and other devices are powered off when not in use. Installing motion sensors in less frequented areas such as bathrooms or storerooms can ensure that lights are only on when needed. Additionally, adjusting thermostats during non-working hours can help reduce heating and cooling expenses. These minor changes can add up to significant business electricity savings over time, especially in larger facilities.
38. Use IoT Thermostats
The rise of Internet of Things (IoT) devices has transformed energy management. Installing IoT-enabled thermostats allows you to monitor and control your HVAC systems remotely and in real time. These smart thermostats learn your business’s usage patterns and adjust heating or cooling automatically to save energy. For example, the thermostat can lower the temperature during off-hours or increase efficiency during peak times. IoT thermostats also provide valuable data about your energy usage patterns, helping you make informed decisions that lead to energy cost reduction.
39. Power Down Equipment When It’s Not In Use
One of the most straightforward ways to reduce energy consumption is to power down equipment when it’s not in use. Many businesses leave computers, monitors, printers, and other devices running overnight, wasting energy. Implementing a policy that requires all non-essential equipment to be turned off or put into sleep mode at the end of the day can lead to substantial savings on your energy bill. Power strips with timers can also help automate this process, ensuring that equipment is completely powered down during non-working hours.
40. Change Your HVAC Filters
Regularly changing your HVAC filters can significantly improve your system’s efficiency and reduce energy consumption. Dirty filters make your HVAC system work harder to push air through, consuming more energy and reducing its lifespan. Scheduling routine filter changes ensures that your heating and cooling systems operate at peak efficiency, helping to lower electricity bills and prolong the life of your HVAC units. This is especially important for businesses in areas with extreme weather, where HVAC systems are used heavily throughout the year.
41. Check Your Building’s Insulation
Proper insulation is key to maintaining energy efficiency, especially for businesses in colder climates. Inadequate insulation can result in heat loss during the winter and higher heating costs. In summer, poor insulation can make your air conditioning work harder, driving up electricity costs. Inspect your building’s insulation and consider upgrading to more energy-efficient materials if needed. Sealing gaps around windows and doors and adding insulation to walls, attics, and floors can significantly reduce business energy costs.
42. Establish Energy Efficiency SOPs
Creating standard operating procedures (SOPs) for energy efficiency ensures that everyone in your organization follows best practices to reduce energy consumption. SOPs can cover everything from turning off lights and equipment when not in use to maintaining optimal thermostat settings. Employee training and regular reminders can reinforce these practices, helping to create a culture of sustainability within the company. Energy-efficient SOPs can lead to long-term savings and help meet your business’s environmental goals.
43. Consider Renewable Energy
Investing in renewable energy sources such as solar, wind, or geothermal power can drastically reduce long-term energy costs. While the initial investment might be substantial, the long-term savings and potential tax incentives make renewable energy a viable option for many businesses. Solar panels, for example, can generate electricity on-site, reducing your dependence on the grid and potentially allowing you to sell excess energy back to the utility. With the growing focus on green energy trends, adopting renewable energy can also enhance your company’s sustainability profile.
44. Install A Microgrid
For businesses looking to take control of their energy usage, installing a microgrid can be a game-changer. Microgrids use a combination of energy sources, such as solar panels, wind turbines, and natural gas generators, to create a self-sustaining power system. Microgrids can operate independently or in conjunction with the main grid, providing energy resilience during outages and reducing reliance on volatile energy markets. Additionally, microgrids allow businesses to avoid peak energy pricing by using stored energy during high-demand periods, leading to substantial savings.
45. Utilize Artificial Intelligence
Artificial Intelligence (AI) is revolutionizing energy management by providing predictive analytics and automated control systems that help businesses optimize energy usage. AI systems can analyze historical energy consumption data, predict future demand, and adjust energy usage in real time to avoid unnecessary costs. AI can also help businesses participate in demand response programs, which offer financial incentives for reducing energy usage during peak demand periods. By leveraging AI, businesses can optimize their energy strategy and reduce costs while improving overall efficiency.
46. Resequence HVAC Controls
Resequencing your HVAC controls can drastically improve energy efficiency. Many HVAC systems operate on outdated settings that don’t reflect the business’s current needs. By hiring an HVAC technician or energy engineer to reprogram your system, you can fine-tune the way your HVAC operates based on factors such as building occupancy and outdoor temperature. For example, adjusting the sequence of operations to prioritize energy efficiency during peak hours can lead to significant savings.
47. Consider Water Consumption
Many businesses overlook water consumption as a contributor to their energy costs. However, heating and cooling water can be energy-intensive. Technologies like backflow preventers and efficient water heating systems can reduce both water and energy bills. Businesses that use significant amounts of water, such as manufacturing plants or hospitality businesses, can benefit from water conservation measures, such as installing low-flow fixtures or reusing greywater for non-potable purposes. Reducing water usage lowers your water bill and decreases the energy needed to heat or pump water.
48. Encourage Remote Working
The shift toward remote working can provide significant savings for businesses. Fewer employees in the office mean reduced energy consumption for lighting, heating, cooling, and equipment use. By encouraging a hybrid or remote work model, businesses can cut back on office space and reduce overall energy costs. Remote work also contributes to lower electricity bills for small businesses, especially those in sectors where a physical presence is not always required.
49. Install A Tankless Water Heater
Unlike traditional water heaters, which store and continually heat water, tankless water heaters heat water on demand. This makes them 15 to 30% more energy-efficient, reducing both your energy costs and environmental impact. For businesses with significant hot water needs, such as restaurants or hotels, switching to tankless water heaters can result in substantial long-term savings. Additionally, many tankless water heaters qualify for energy efficiency rebates and tax incentives, further offsetting the initial installation cost.
50. Go Paperless
Adopting a paperless office not only reduces your environmental footprint but also cuts energy consumption. Eliminating printers, copiers, and other paper-related equipment can lower your electricity usage. In addition, digital filing systems can reduce the need for storage space, allowing businesses to downsize office areas and save on lighting and HVAC costs. By going paperless, your business can improve operational efficiency while contributing to a more sustainable future.
Challenges and Opportunities for Businesses in 2025
Despite rising energy costs, there are numerous opportunities for businesses to save money through energy cost reduction strategies. By staying informed about the latest energy trends and implementing energy-efficient practices, businesses can lower utility bills and boost profitability.
One way to stay ahead of rising costs is by adopting renewable energy sources. Solar and wind energy, along with energy storage solutions, can help businesses reduce dependence on traditional utilities and create long-term savings. If you’re looking for ways to future-proof your energy strategy, check out our guide to renewable energy trends for 2025.
The Bottom Line
Reducing energy costs in your business in 2025 is all about implementing effective strategies and staying informed about market changes. By following the 50 energy-saving tips outlined in this article, businesses can make meaningful reductions in their utility bills, improving both their bottom line and sustainability efforts.
If you’re looking for more tailored advice or would like help navigating energy contracts, contact Diversegy today. Our team of experts is ready to help you cut energy costs and optimize your business energy strategy for the future.
