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How To Reduce Energy Costs At Your Business in 2026?

December 5, 2025

Energy costs can be a big expense on your profit and loss statement. Lowering your utility bills can help your bottom line right away. In this article, we share expert tips to help businesses reduce their total energy costs. Energy prices continue to change, and the global energy market is still unstable. This makes it more important than ever to focus on ways to cut energy costs. Here are the top ways to reduce business energy costs in 2026 and in the future.

How To Reduce Energy Costs for Small and Large Businesses?

The United States Small Business Administration says that about 40% of business expenses come from energy costs. As a business owner, you are always looking for ways to lower these costs. No matter if you run a small business or a large company, you can use simple and effective energy-saving steps to reduce costs and increase profits. In this article, we share 50 tips to help your business use less energy. But first, here are the top ten ways to cut costs.

Top Energy-Saving Tips for Businesses in 2026

Pay Attention to Your Equipment

Make sure all equipment, like computers, printers, lights, and other devices, has an Energy Star rating. This means they use less energy. Set the equipment to sleep mode after business hours. You can also plug devices into power strips so you can turn everything off with one switch. Use smart thermostats and LED lights to cut energy costs. In places that are not used often, such as bathrooms and conference rooms, install motion sensors. These sensors turn lights on and off automatically.

Educate Your Employees

Encourage employees to follow simple energy-saving steps at work. Small actions can make a big difference. For example, turn off lights when leaving a room and set thermostats to the best energy-saving temperature. Assign an employee to lead energy-saving efforts. They can remind everyone to unplug shared devices, like coffee pots or phone chargers, when not in use. These small efforts together can lower energy costs for your business.

Inspect Your Energy Tariffs

Energy tariffs decide how utilities charge you for delivering electricity or gas. Many businesses ignore tariff details and end up paying more than they should. Tariffs can change based on your business size, peak demand times, or location. Review your utility bills often to make sure you are on the best and cheapest tariff. In some cases, you may be able to switch to a lower-cost tariff that matches your energy use better. This is very important if your energy usage has changed over time. An energy broker can help you see if you qualify for a cheaper tariff and find ways to save money.

Calculate Your Business Energy Consumption

Knowing how much energy your business uses is important for cutting costs. To calculate energy use, track the kilowatt-hours (kWh) used during different times, such as peak and off-peak hours. Studying this data can show where energy is being wasted. For example, unusual spikes in usage may mean your HVAC system is not working properly, or lights are being left on. When you measure energy use correctly, you can make improvements that lower your costs. You can use energy management or hire a consultant to monitor your energy use and create a plan to reduce it.

Avoid Energy Scams

Energy scams can cost your business a lot of money. One common scam is slamming, which happens when your business is switched to a new supplier without your permission. Other scams include hidden charges or sudden rate increases. Always check your contracts carefully and review your bills for any charges you don’t recognize. Be cautious when dealing with energy suppliers, especially in deregulated markets where some third-party suppliers may use dishonest tactics. Make sure you only sign contracts with trusted and verified companies. If you think you have been scammed, report it right away to the proper regulatory agency. Working with a reliable energy broker can help you avoid scams and ensure you get the best deal.

Renew Your Supply Contract at a Lower Rate

Renewing your energy supply contract at the right time can help you get lower rates. It also protects your business from future price increases. Energy prices change because of supply, demand, and world events. Working with an energy broker can help you track these trends. You can then renew your contract when prices are low. For example, if energy prices are expected to rise in 2026, renewing early can lock in good rates and save money long-term. Start the renewal process well before your current contract ends to avoid paying higher out-of-contract rates.

Be on the Lookout for Hidden Charges

Hidden charges can appear on your energy bills and increase your costs without you noticing. These charges may come from complex tariff rules, late fees, or delivery fees that were not disclosed. Utilities may also add extra fees for grid maintenance or transmission that are not obvious. Check every line on your bill to spot unusual charges. If something looks wrong, contact your utility or energy supplier. You can also hire a utility bill auditing service to find errors or overcharges and make sure you only pay what you owe.

Learn What to Do When Buying a Business

When buying a business, check its current energy contracts. If the business has a good rate, you may be able to take over the contract and save money compared to market rates. If the contract has bad terms, you might want to renegotiate or cancel it before completing the purchase. This is especially important in deregulated states, where you have more supplier options. An energy advisor can help you decide whether keeping the old contract or getting a new one will save the most money.

Adhere to Material Change Clauses

If your business has a big change in energy use, like expanding operations or moving, check the material change clause in your contract. Not telling your supplier about major changes can lead to penalties or higher rates. Material change clauses protect both the supplier and your business. They make sure the contract matches your actual energy use. Always communicate with your supplier if your energy needs change. This helps you avoid extra costs and ensures a smooth transition.

Learn What to Do When Relocating

If your business is moving within the same utility area, transfer any existing energy contracts. This helps avoid cancellation fees or being put on a higher default rate. Utilities may charge penalties for ending a contract early. Transferring your contract to the new location can prevent extra costs. Contact your supplier well before the move to make sure everything goes smoothly and to check rates for the new location. Energy brokers can help guide you and avoid costly mistakes.

Avoid Early Termination Penalties

Most energy contracts have early termination clauses. These clauses charge fees if you cancel the contract before it ends. These fees can be high and can wipe out any savings from switching suppliers too soon. Before ending a contract, check the terms carefully. Look at other options, like negotiating new terms or transferring the contract. Energy brokers can help you find ways to lower these penalties or negotiate a better contract extension.

Take Advantage of Contract Rescission Periods

Many states let businesses cancel an energy supply contract within a short rescission period, usually a few business days after signing. This period is useful if market conditions change and better rates appear. Watch the energy market after signing your contract. You can use this time to renegotiate or cancel if needed. Knowing your state’s rules about rescission helps you make smart decisions and can save your business money on energy.

Long vs. Short Term Energy Contracts

When signing an energy contract, decide between long-term and short-term agreements. Long-term contracts lock in rates for several years, giving stability but possibly missing lower future rates. Short-term contracts are more flexible and can be good if prices are expected to drop. Your choice depends on market conditions and your energy strategy. Energy brokers can help you make a smart decision.

Encourage Remote Working

Having fewer employees in the office reduces energy use for lighting, heating, cooling, and equipment. Hybrid or remote work cuts office space needs and lowers energy bills. This is especially helpful for small businesses. A paperless office reduces energy use by eliminating printers, copiers, and storage space needs. Digital filing systems allow smaller office spaces, cutting lighting and HVAC costs. Going paperless improves efficiency and supports sustainability.

Fix vs. Float: Decide What’s Best for You

Choosing fixed or floating energy rates affects your energy costs. Fixed rates lock in a price for the whole contract, giving predictable bills. Floating rates follow market prices. They may save money when prices are low, but they can go up during market swings. Assess your business’s risk and energy needs. An energy broker can help you pick the best option based on market trends.

Consider Renewable Energy

Investing in solar, wind, or geothermal energy can cut long-term energy costs. The initial cost may be high, but savings and tax incentives make it worthwhile. Solar panels can generate electricity on-site and reduce grid dependence. Excess energy can sometimes be sold back to the utility. Renewable energy also improves your company’s sustainability image.

Related Blog:
Renewable Energy Trends 2026: What To Expect

Install Smart Meters

Smart meters let businesses see their energy use in real time. This helps you make better decisions about how to use less energy. Many utilities are replacing old analog meters with smart meters. Call your local utility to check if your business already has one. You can also log in to the online portal to see important information about your energy usage.

Use IoT Thermostats

IoT (Internet of Things) thermostats let you monitor and control HVAC systems remotely. They learn your business’s patterns and adjust heating or cooling automatically. For example, they can lower temperatures during off-hours or optimize efficiency during peak hours. IoT thermostats also give data to help you make better energy decisions.

Implement an Energy Incentive Program

Energy incentive programs reward employees for saving energy. For example, departments can be recognized for reducing HVAC use, or employees can get bonuses for cutting overall energy. Engaging employees in saving energy creates a culture of sustainability. This lowers energy costs and reduces your carbon footprint.

Avoid Energy Buying Mistakes

Common mistakes include not reading the contract, ignoring market trends, or signing without advice. These can make you pay too much or get stuck in bad contracts. Always read contracts carefully. Consider professional advice from energy consultants. They can help you make informed energy buying decisions.

Avoid Wasting Energy

Stop wasting energy by turning off lights, computers, and other devices when not in use. Use motion sensors in bathrooms or storerooms so lights are only on when needed. Adjust thermostats during non-working hours. Small changes like these can add up to big savings, especially in large facilities.

Check Your Building’s Insulation

Good insulation keeps your building energy-efficient. Poor insulation causes heat loss in winter and higher AC costs in summer. Inspect insulation and upgrade if needed. Seal gaps around windows and doors, and add insulation to walls, attics, and floors. This can greatly reduce energy costs.

Establish Energy Efficiency SOPs

Create standard operating procedures (SOPs) for energy efficiency. SOPs ensure everyone follows best practices, like turning off lights and keeping thermostats at optimal settings. Train employees and send reminders. This creates a sustainable company culture and leads to long-term savings.

Install a Microgrid

Microgrids combine energy sources like solar, wind, and natural gas generators. They create a self-sustaining power system. Microgrids can work with or independently from the main grid. They provide energy during outages and help avoid peak energy pricing. This can lead to big savings.

Utilize Artificial Intelligence

AI helps manage energy by analyzing data and predicting demand. It can automatically adjust usage to save money. AI also helps businesses join demand response programs, earning incentives for reducing energy during peak hours. Using AI can lower costs and improve efficiency.

Resequence HVAC Controls

Old HVAC settings may not match current needs. Resequencing controls improves efficiency. Hire an HVAC technician or energy engineer to reprogram your system. Adjust settings based on occupancy and outdoor temperature. This can save a lot on heating and cooling costs.

Consider Water Consumption

Heating and cooling water uses energy. Reducing water use saves energy and money. Use efficient water heaters, backflow preventers, low-flow fixtures, or reuse greywater. Businesses using a lot of water, like hotels or factories, can benefit the most.

Install a Tankless Water Heater

Tankless water heaters heat water only when needed. They are 15-30% more efficient than traditional heaters. Businesses with high hot water needs, like restaurants or hotels, can save a lot. Many tankless heaters qualify for rebates or tax incentives, reducing the installation cost.

Take a Peek at Your Peak Demand

Know when your business uses the most energy. Utilities often charge more during peak times. To save money, run energy-heavy equipment during off-peak hours. You can also stagger when machines start to spread out energy use. Some businesses install on-site generators to reduce demand spikes and lower costs.

Take Advantage of Free Energy Audits

Many utility companies offer free energy audits. These audits show where your business is wasting energy. They help you find ways to use less energy, like switching to efficient lighting or joining demand response programs. Utilities may also suggest upgrades, such as installing LED lights or improving insulation.

Consider a Hybrid Energy Contract

Large businesses can use hybrid energy contracts to save money. These contracts offer lower prices during off-peak hours. You pay a fixed rate during peak hours and take advantage of lower rates off-peak. Energy brokers can help you get a contract that fits your business and saves on energy costs.

Utility Bill Auditing as a Cost-Saving Strategy

Checking your utility bills can find mistakes or errors. This can lead to refunds and long-term savings. For example, if your business is tax-exempt but has been paying sales tax on energy, an audit could get you a big refund. Auditing your bills is an easy way to make sure you are not paying too much for energy.

Explore Alternative Fuels

If natural gas is available, using it instead of electricity for some operations, like heating, can save money. Some utilities offer incentives for switching to alternative fuels. Contact your local provider to learn about these options. If natural gas is not available, consider renewable energy, like solar power.

Switch to a Cheaper Distribution Rate

Some businesses can get a lower rate for energy delivery. Many businesses don’t know this. Contact your local utility to see if your business qualifies for a cheaper delivery rate. Energy brokers can help you understand the process and choose the best rate plan.

Power Down Equipment When It’s Not in Use

Turn off computers, monitors, printers, and other devices when not needed. Leaving them on overnight wastes energy. Make a policy to turn off or put non-essential equipment to sleep at the end of the day. Use power strips with timers to automate this. This can save a lot on your energy bill.

Measure Reactive Power (KVA or KVar)

Reactive power is electricity that isn’t used efficiently. It can increase energy costs. Some utilities charge extra for reactive power. Installing equipment like capacitors reduces reactive power. Monitoring and managing it can lower bills and improve energy efficiency.

Check Sales Tax Exemptions

Some businesses may not have to pay sales tax on energy. Non-profits or certain manufacturers may qualify. Check your state’s tax rules. If eligible, make sure your energy bills reflect the exemption. This can save your business a lot of money over time.

Related Blog:
Overview of Utility Sales Tax Exemptions

Change Your HVAC Filters

Dirty HVAC filters make systems work harder and use more energy. Changing filters regularly improves efficiency and reduces costs. It also prolongs the life of your HVAC units. This is important in areas with extreme weather when heating or cooling is used heavily.

Hire an Energy Broker to Watch the Market

Energy markets can change quickly. Hiring an energy broker can help your business save money. Brokers watch market changes and help you lock in good energy rates when prices are favorable. Knowing energy market trends is important for reducing costs.

Switch Energy Suppliers

Check your energy supplier carefully to avoid hidden fees or bad practices. Switching suppliers can be tricky and should be done carefully. Compare price and reputation to make sure your energy plan works well for your business.

Dissect Your Energy Bill

It is important to understand what is on your energy bill. Check it every month to find mistakes or unusual charges. Utility bills often have errors, and many customers pay them without noticing. A utility bill audit can help make sure your bills are correct.

Install Energy Storage

Energy storage systems, like batteries, let your business store extra energy during off-peak times. You can then use this stored energy during peak hours. This helps lower electricity costs and reduces demand charges.

Shop for Lower Natural Gas Rates

The natural gas market has changed a lot because of global events. Right now may be a good time to lock in lower gas rates. Shopping for natural gas can be complicated, so it is best to get help from a gas expert.

Related Blog:
Trends in the Natural Gas Market for 2026

Pay Attention to Energy Prices

Watching energy price trends in 2026 can help your business make smart choices about buying energy and renewing contracts. Look at our Energy Prices 2026 forecast for more helpful information.

Consider Global Events

Global events can affect U.S. energy prices. For example, the unstable energy markets in Europe can influence prices here. Stay informed about world energy trends so you can prepare for changes.

Enroll in a Demand Response Program

Demand response programs reward businesses for using less energy during peak hours. This helps lower energy costs and can also earn your business extra money.

Measure Your Usage

Tracking your energy use is important for cutting costs. Energy technology tools can give real-time data. This helps you find areas where energy is wasted and take steps to save money.

Negotiate with Your Supplier

If your business is in a deregulated energy market, you can negotiate for better rates. Using tools like blend-and-extend contracts can help lower costs when market prices go down.

Challenges and Opportunities for Businesses in 2026

Energy costs are rising, but businesses can still find ways to save money. Using energy-saving strategies and staying updated on energy trends can lower utility bills and increase profits. One way to handle rising costs is by using renewable energy. Solar and wind power, combined with energy storage, can reduce dependence on traditional utilities and create long-term savings. For more ideas to future-proof your energy strategy, see our guide to renewable energy trends for 2026.

Conclusion

Rising energy costs are a challenge, but businesses have many ways to save. By using energy-efficient practices, monitoring usage, and exploring renewable energy, you can lower bills and protect your profits. Planning, working with energy brokers, and staying informed about market trends will help your business make smart energy decisions. Taking action now can reduce costs, improve sustainability, and prepare your business for the energy landscape in 2026 and beyond.