Commercial & Industrial Energy Use at a Turning Point

As of 2025, the commercial and industrial (C&I) sectors together consume nearly 60% of all electricity in the United States, according to U.S. Energy Information Administration projections. In raw terms, that’s roughly 2.5 trillion kilowatt-hours out of a record-high 4.2 trillion kWh of national demand–with commercial users accounting for about 35% and industrial users 25.5% of U.S. electricity consumption.

This outsized share of energy use carries enormous implications. It means the decisions C&I companies make about energy don’t just impact their own operations; they reverberate across our electric grids, energy markets, and environmental landscape. In fact, the C&I sector’s electricity demand is growing faster than any other, at ~2–3% per year, outpacing residential demand growth. For facility managers and executives, this moment represents a pivotal crossroads. With great power comes great responsibility–and opportunity. Below, we explore the challenges that come with such massive energy usage, and the opportunities for C&I leaders to turn this scale to their advantage.

The Scale and Impact of C&I Electricity Usage

To put it plainly, C&I companies are the heavyweight champions of electricity consumption. Whether it’s a cluster of energy-hungry data centers or a sprawling manufacturing plant, these operations collectively draw the majority of our nation’s power. This gives C&I businesses a correspondingly large influence on the grid and on energy-related emissions. When demand spikes on a hot afternoon due to hundreds of office buildings cranking air conditioners, or when an industrial facility runs processes around the clock, the grid feels it. Grid operators plan infrastructure and generation around where and when C&I load is highest. The significant share of electricity used by C&I also means these sectors bear a huge portion of energy expenditures and volatility. Most importantly, if the U.S. is to meet reliability and sustainability goals, C&I players must be front and center. Their actions can either exacerbate problems – or drive solutions – for the entire energy system.

Indeed, the timing is critical for C&I leaders. After a decade of flat demand (thanks largely to efficiency gains), electricity use is rising again to record levels.

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Grid experts warn that supply isn’t keeping up with “explosive” demand growth from things like AI data centers and electrified transportation, posing risks of energy shortfalls in coming years. Meanwhile, the push for decarbonization is accelerating: regulators, investors, and customers are pressuring businesses to cut carbon footprints now. In short, C&I executives face a convergence of forces – economic, operational, and environmental – making 2025 a defining moment to act on energy strategy. Those who proactively navigate this transition will not only sidestep risks but gain a competitive edge in a new energy era.

Challenges in the Current Energy Landscape

Despite the tremendous opportunities, C&I energy users grapple with the following serious challenges today.

Volatile Energy Costs

Power prices have been on the rise and can swing unpredictably. The EIA projects that average U.S. electricity prices in 2025 will be about 13% higher (in nominal terms) than they were in 2022. Regions that already pay high rates are seeing even sharper increases. For large facilities, this trend strains budgets and complicates planning. Moreover, demand charges – fees based on peak power usage – add a major cost wildcard. These charges typically comprise 20–50% of a commercial electric bill, and in some cases can soar to as much as 70% of monthly electricity costs — meaning one brief usage spike can inflate costs for an entire year. Managing and mitigating energy cost volatility has become a board-level concern for many companies.

Grid Stress and Reliability Risks

The electric grid is under pressure like never before. Rapid load growth is coinciding with an energy transition, putting stress on aging infrastructure. Grid operators warn that demand is outpacing supply, raising the specter of capacity shortfalls and blackouts in various U.S. regions. As one reliability assessment put it, “our infrastructure is not being built fast enough to keep up with rising demand.” For C&I businesses, grid instability is a direct threat – a power outage or curtailment at the wrong time can halt operations and cause hefty losses. Even routine peak periods put stress on the grid; for example, late-afternoon surges (when many commercial HVAC systems run and solar generation dips) force utilities to activate costly standby power plants to keep the lights on. The result is not only higher costs passed to consumers, but also heightened risk of outages. Facility managers are increasingly worrying about energy reliability alongside traditional metrics, because uptime is king for mission-critical operations.

Sustainability and Carbon Pressure

C&I companies face mounting pressure to shrink their environmental footprint. Electricity use in these sectors typically correlates with significant greenhouse gas emissions (unless sourced from renewables), so the spotlight is on C&I to lead in cutting carbon. There are growing regulatory requirements (from efficiency standards to emissions caps) and investor expectations and consumer demand for sustainability are higher than ever. Many corporations have publicly pledged ambitious climate goals – yet meeting them requires tangible reductions in energy consumption and a switch to cleaner power sources. In practice, this creates a complex challenge: how to grow or maintain operations while simultaneously reducing energy intensity and emissions. Companies that fall behind on this front risk not only regulatory penalties but also reputation damage and missed business opportunities. Sustainability is no longer a “nice-to-have” for C&I firms; it’s a core strategic priority driven by stakeholders across the board.

These challenges might seem daunting, but they are two sides of the same coin. The very issues that threaten C&I energy users – high costs, grid stress, climate imperatives – also point to where the most impactful solutions lie. Forward-thinking leaders are responding by reimagining how their organizations use and manage energy, turning challenges into opportunities.

Energy Innovations

Encouragingly, C&I companies today have more tools and technologies than ever to master their energy destiny. The following are key opportunity areas that can unlock cost savings, resilience, and sustainability gains.

Efficiency and Energy Conservation

Using less energy in the first place remains the most direct way to cut costs and emissions. Years of flat electricity demand earlier this century were largely thanks to efficiency improvements – and there is still vast potential for more savings. From LED lighting and advanced HVAC controls to high-efficiency motors and heat recovery systems, efficiency measures often pay for themselves and then some. Implementing robust energy audits and retro-commissioning of facilities can uncover waste and identify upgrades (like better insulation or smarter scheduling of equipment) that reduce consumption without sacrificing output. Every kilowatt-hour saved is one that doesn’t have to be generated or paid for. In addition to equipment upgrades, cultivating an energy-conscious culture among staff (e.g. turning off idle machinery, optimizing processes) can yield significant reductions. Efficiency truly is the first fuel: it directly offsets demand growth and insulates businesses from price spikes and supply constraints.

Demand Flexibility and Peak Management

The flip side of reducing overall energy use is shifting when energy is used to flatten out those costly peaks. C&I facilities are increasingly embracing demand response programs and on-site energy storage to manage when they draw from the grid. By being flexible – for instance, temporarily reducing HVAC or industrial loads during peak grid hours or running certain processes at off-peak times – companies can avoid high peak rates and even earn incentives from utilities for helping balance the system. Battery energy storage solutions such as Posh are game-changers here: they charge when power is cheap or abundant and discharge during peak demand, shaving the facility’s peak load. This directly cuts demand charges and eases grid stress.

Utilities and regulators are actively encouraging such practices; stakeholders across the industry are committing more resources to energy efficiency and demand response programs to improve reliability. Many C&I firms are also exploring load shifting strategies – for example, pre-cooling a building in the morning so that less HVAC is needed in late afternoon. In an era of tight capacity margins, demand flexibility is a critical tool for supporting grid reliability while reducing operational costs.

Clean Energy Adoption

Another major opportunity is cleaning the energy supply feeding C&I facilities. Declining costs of renewables and favorable policies have made options like solar photovoltaics, wind power procurement, and battery storage more accessible than ever. Companies can install on-site solar panels (e.g. on warehouse rooftops or parking canopies) to directly offset a portion of their grid consumption with zero-carbon electricity. They can also invest in larger off-site renewable projects or enter power purchase agreements (PPAs) to secure a long-term supply of green power at stable prices. This not only hedges against fossil fuel price volatility but also drives progress toward sustainability targets. Notably, much of the new electric generation capacity being added in the U.S. is coming from solar farms and battery storage facilities – a trend C&I consumers can capitalize on by aligning with these clean energy sources. Some industrial players are even exploring using their own waste heat or biomass for cogeneration. By diversifying energy supply with renewables, businesses improve resilience (solar panels and batteries can keep critical loads running during outages) and demonstrate leadership on climate action. Clean energy is increasingly a win-win: good for the planet, and often good for the bottom line over the long term.

Smart Energy Management and Analytics

Last but not least, digital intelligence is revolutionizing how C&I facilities optimize energy. Advanced energy management systems (EMS), sensors, and AI-driven analytics enable a level of visibility and control that was unthinkable a decade ago. “Smart” platforms can monitor real-time energy usage across a facility, predict trends, and automatically control equipment for maximum efficiency. For example, intelligent building management systems might dim lights and adjust ventilation when occupancy is low, or schedule electric vehicle charging at times of surplus renewable energy. Predictive analytics can forecast peak demand days so a factory can preemptively reduce load or fire up a backup generator.

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The results are tangible: smart energy solutions are already cutting peak consumption and saving companies substantial money. In one example, deploying AI-driven battery systems to handle peak loads helped commercial buildings slash their utility bills by tens of thousands of dollars annually. By analyzing data and automating responses, these systems take a lot of the guesswork out of energy management. The bottom line is better efficiency, lower costs, and improved reliability without constant manual intervention. Embracing digital energy management is akin to giving your facility a brain – one that never stops hunting for optimization opportunities.

Navigating a Critical Moment

Standing at this intersection of rising demand and rapid transition, C&I energy leaders have a chance to turn an immense challenge into a defining opportunity. The data is clear that business-as-usual is no longer tenable – not when 60% of the nation’s electricity is on your shoulders, costs are climbing, the grid is straining, and climate accountability is growing sharper by the day. Yet the path forward is also clearer than ever: through efficiency, flexibility, clean power, and smart management, C&I organizations can simultaneously reduce operational costs, enhance resilience, and meet sustainability goals. In fact, these objectives reinforce each other. An efficient, flexible facility is less exposed to price spikes and outages. A cleaner energy supply often means a more stable long-term cost structure. And a smarter, data-driven energy strategy yields continuous improvements.

C&I energy use may be massive, but so is the opportunity. By embracing the strategies outlined above –  facility managers and executives can steer their organizations through this energy transition. The stakes have never been higher, but neither have the potential rewards. It’s time to turn 60% of U.S. electricity consumption from a looming liability into a shining example of innovation and leadership in the energy world.

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