Small Business Energy Audit: Step-by-Step Guide

Key Takeaways

Looking for ways to help your small business save on energy costs? Don’t skip the most important first step: conducting an energy audit. In this guide, we’ll explain everything you need to know about energy audits for small businesses.

• A small business energy audit is the essential first step to cutting energy costs and improving efficiency.
  
• Audits examine lighting, HVAC, building envelope, equipment and daily habits to uncover hidden waste and savings opportunities.
  
• You can perform a DIY audit in simple spaces, but professional audits are best for larger, older, or more complex buildings.
  
• The step-by-step process includes reviewing 12 months of bills, walking the facility, checking equipment efficiency, and ranking fixes by impact and cost.
  
• Common issues found include outdated lighting, air leaks, inefficient HVAC, phantom loads, and poorly maintained refrigeration or water heating systems.
  
• Acting on audit findings with low-cost fixes, an action plan, ongoing monitoring and available rebates helps build a more efficient, comfortable and sustainable business over time.

With a clearer picture of how your energy is being used, you’ll be ready to make smart upgrades that benefit your budget, reputation, and the environment.

Beyond financial savings, improving efficiency also supports your environmental goals. Cutting wasted energy reduces your business’s carbon footprint, which can strengthen your reputation and appeal to eco-conscious customers. It’s also a proactive way to prepare for future efficiency programs, rebates and funding opportunities through initiatives like the USDA Rural Energy for America Program (REAP) and other state or utility incentives.

A small business energy audit is the first essential step toward understanding where your energy dollars go, and how to get more value out of them.

A typical small business energy audit may cover:

• Lighting systems: fixtures, bulbs, and controls.
• Heating, ventilation and air conditioning (HVAC): filters, ducts, and thermostat.
• Building envelope: insulation, windows and air leaks.
• Appliances and office equipment: refrigerators, computers, and printers.
• Water heating and usage: temperature settings and leaks.
• Operational habits: hours of use, occupancy, and maintenance routines.

Small business owners can choose to perform a DIY energy audit using checklists and tools from resources like EPA’s Smart Steps to Sustainability or ENERGY STAR for Small Businesses. However, hiring a professional energy auditor may be worth the investment, especially for larger buildings or older systems. Professional audits provide detailed data and recommendations that can lead to long-term savings, and many are subsidized through local utilities or federal programs like USDA REAP.

The goal of any energy audit isn’t just to identify where energy is being wasted — it’s to create a clear, actionable plan for reducing consumption. Once you understand where improvements can be made, you can take steps to lower costs, increase comfort, and make your business more sustainable for the long term.

• Cases where a professional is recommended — You might want to hire a professional auditor if your business:
  • Operates in a large or multi-floor building
  • Relies on complex systems, like commercial refrigeration, manufacturing equipment or specialized machinery
  • Occupies an older structure

Many local utilities, including EPB, and federal programs, such as EPA-supported energy efficiency programs and USDA REAP offer free or discounted energy audits for eligible businesses. Checking those first can help you decide the most cost-effective path forward.

2. Gather 12 months of utility bills from your provider.
Start by collecting at least a year’s worth of your electric, gas, and water bills. This gives you a clear baseline of how your energy use changes throughout the year and helps you spot patterns that may not be obvious month-to-month. Reviewing your bills can reveal hidden inefficiencies, such as equipment running longer than necessary or heating and cooling systems working overtime.

When reviewing your bills, look for:

• Seasonal trends: Higher summer or winter bills may indicate HVAC systems that aren’t operating efficiently.
  
• Unexpected spikes: A sudden jump in usage could signal a malfunctioning appliance or lighting issue.
  
• Demand charges: If your utility bills include extra costs for peak usage times, find out what causes those surges.
  
• Consistent high usage: Flat, high energy use all year long may mean lights or equipment are being left on unnecessarily.
  
• Rate changes: Watch for shifts in energy pricing or rate structures that could affect your total costs.

Comparing your usage over time can help you identify where to focus your audit efforts — especially if certain months consistently cost more without a clear reason.

3. Walk through your facility.
Take a slow, careful tour of your business during normal operating hours to see how energy is being used in real time. The goal is to spot anything that’s wasting electricity, heating or cooling without contributing to comfort or productivity. Bring a notebook (or your phone’s notes app) so you can jot down observations as you go.

As you move through each area, check for:

• Air leaks: Check around doors, windows, vents and loading docks — even small gaps can let conditioned air escape and force your HVAC system to work harder.
  
• Thermostat settings and HVAC filters: Confirm that thermostats are set appropriately for occupied hours, and that air filters are clean and replaced regularly.
  
• Lighting efficiency and usage: Look for older fluorescent or incandescent bulbs that could be replaced with ENERGY STAR® certified LEDs. Also, identify areas where natural daylight could reduce the need for artificial lighting, such as near large windows or skylights.
  
• Lighting controls: Check if lights are left on in empty rooms, restrooms or storage areas. Consider motion sensors, timers, or dimmers to automatically reduce usage.
  
• Equipment and appliances: Make sure computers, monitors, printers and other office equipment are set to sleep or power-saving modes when not in use.
  
• Refrigeration and kitchen appliances: Inspect door seals for wear, clear dust from condenser coils and ensure temperature settings are appropriate.
  
• Water fixtures: Look for dripping faucets, leaking toilets or hot water settings that are higher than necessary.

EPB Energy Pro Tip: Try doing part of your walkthrough at the start or end of the business day. You may notice lights, fans or machines that stay on after hours — a common source of wasted energy.

4. Check equipment efficiency.
Once you’ve completed your walkthrough, take a closer look at the systems and equipment that use the most energy. This step helps you find outdated or inefficient devices that could be costing your business money every month.

Here’s what to inspect:

• Lighting: Identify old fluorescent tubes, incandescent bulbs or halogen spotlights that can be replaced with ENERGY STAR® certified LEDs. LEDs use far less energy, last longer, and produce less heat, which can also reduce cooling costs.
  
• HVAC systems: Check air filters, ducts and vents for dust buildup or blockages. Make sure thermostats are programmable and placed away from direct sunlight or drafts. If your HVAC system is more than 10–15 years old, it may be worth evaluating for an upgrade to a high-efficiency model.
  
• Refrigeration and kitchen equipment: Examine door seals for cracks, clean condenser coils and ensure that refrigerator and freezer temperatures are set to recommended levels (typically 37–40°F for refrigerators and 0°F for freezers).
  
• Office equipment and electronics: Look for computers, printers, monitors and chargers that stay powered on when not in use. Enable automatic sleep or power-saving modes wherever possible.
  
• Water heaters and boilers: Confirm that water temperatures are set to 120°F for most uses and that the tanks or pipes are properly insulated.
  
• Motors and fans: Check for worn belts, unbalanced blades or continuous operation. Consider installing variable-speed motors or smart controls for better efficiency.

If you have access to basic tools, such as a watt meter or infrared thermometer, you can measure how much energy individual devices use and discover hot or cold spots that have signs of energy loss.

5. Record and rank your findings.
List everything you notice, from leaky doors to outdated bulbs. Then, prioritize by potential savings and effort required. Quick, low-cost fixes like installing LED lighting or sealing gaps often deliver the fastest return.

6. Create an action plan.
Compile your notes into a simple energy-saving plan. Include estimated costs, potential savings, and next steps. Here’s an example of what your plan might include:

• Replace all CFLs with LEDs.
• Seal gaps around windows and loading docks.
• Adjust thermostats and install programmable controls.
• Unplug devices when not in use.
• Schedule regular HVAC maintenance.

By the end of your audit, you’ll have a clear picture of how your business uses energy and a practical roadmap for making improvements that cut costs and boost comfort.

Pros:

• Free or inexpensive to perform using checklists and basic tools.
• Quick to complete — often just a few hours or a single afternoon.
• Ideal for smaller spaces or simple systems like offices, retail shops, and cafés.
• Helps build awareness of daily habits and low-cost improvements.

Cons:

• Limited by what you can see or measure without specialized tools.
• May overlook deeper issues with wiring, HVAC balance, or insulation.
• Requires time and attention to detail to gather accurate data.
  

Professional Energy Audits
Professional energy auditors use specialized diagnostic equipment, such as blower doors, infrared cameras and data loggers, to analyze how efficiently your systems are running. Their findings can reveal hidden inefficiencies that might otherwise go unnoticed.

🧑‍🔧EPB Energy ProsSM for Business Tip: If you’re an EPB customer, you can schedule a free consultation from our local energy experts to discover which upgrades will have the biggest impact on your business’s energy savings. Learn more.

Pros:

• Provides a detailed, data-backed report of your building’s performance.
• Identifies cost-saving opportunities with estimated payback periods.
• Especially valuable for larger facilities, complex systems, or older buildings.
• May qualify your business for rebates, tax incentives or energy-efficiency grants.

Cons:

• Involves an upfront cost (which varies based on building size and complexity).
• May require scheduling downtime or after-hours access for equipment testing.

If you’ve already completed a DIY walkthrough, a professional audit can be a great next step to confirm your findings and uncover additional ways to save.

Solution:

• Replace outdated bulbs with ENERGY STAR® certified LEDs. They use up to 90% less energy and last up to 25 times longer than incandescent bulbs.
• Add motion sensors or occupancy sensors in bathrooms, breakrooms and storage areas. That way, the lights automatically turn off when not in use.
• In rooms with plenty of daylight, install dimmers or daylight harvesting controls. These devices automatically adjust lighting based on natural light levels throughout the day.
• Install timers for lighting that requires a consistent schedule. That way you can automate lighting for signage, display cases, plants, or aquariums.
• Consider investing in a smart lighting system. Wi-Fi-enabled bulbs or centralized smart controls let you schedule, dim or turn lights on and off remotely.
• Automate curtains, blinds or shades to open during the day and close at night. This step reduces the need for artificial light while helping regulate indoor temperatures.

2. Air leaks and poor insulation: Small gaps around doors, windows and ductwork allow conditioned air to escape and outdoor air to enter. This forces your HVAC system to work harder, increasing your energy costs, and reducing comfort.

Solution:

• Inspect for gaps around doors, windows and vents. You can use an incense stick or handheld smoke pen to see if air is moving where it shouldn’t.
• Seal leaks with weatherstripping, caulk or foam insulation. These low-cost fixes can dramatically improve comfort and efficiency.
• Add or upgrade insulation in attics, walls or crawl spaces. Proper insulation helps maintain stable indoor temperatures year-round.
• Check ductwork for leaks or loose connections. Sealing ducts can improve heating and cooling efficiency by up to 20%, according to the DOE.
• Install door sweeps and insulated window coverings. These small changes prevent air exchange during hot or cold months.

3. Inefficient HVAC systems: Heating and cooling account for a large portion of most commercial energy use, often 30–40%, according to the DOE. Dirty filters, outdated systems or poor maintenance can lead to wasted energy and uneven temperatures.

Solution:

• Replace HVAC filters every one to three months. Clean filters improve air flow and reduce strain on your system.
• Schedule preventive maintenance twice a year. Professional inspections help ensure your equipment runs at peak efficiency.
• Install programmable or smart thermostats. These devices automatically adjust temperature settings based on your business’s open hours.
• Inspect air ducts and vents for leaks or blockages. Proper airflow improves performance and comfort.
• If your system is more than 10–15 years old, consider upgrading to an ENERGY STAR® certified model. Modern systems can use up to 30% less energy than standard units.
• Use ceiling fans strategically. They help distribute air evenly, reducing the need for continuous heating or cooling.

4. Phantom energy loads (also called “vampire power” or “standby energy”): Many electronics and appliances continue to draw small amounts of electricity even when turned off or in standby mode. Standby power can make up 5–10% of total energy use in commercial buildings.

Solution:

• Unplug equipment at the end of the day. Focus on items like phone chargers, printers, and coffee makers that don’t need continuous power.
• Use smart power strips or programmable timers. These automatically cut power to devices after hours or when not in use.
• Enable power-saving or sleep modes on computers and monitors. Modern devices often include built-in energy management settings.
• Consolidate charging stations and shared electronics. Centralized power hubs make it easier to shut everything down at once.
• Educate staff about turning off devices. Creating a simple checklist can help reduce energy waste.

5. Old or inefficient refrigeration equipment: Refrigerators and freezers with worn seals, dusty coils or outdated compressors can use far more energy than necessary.

Solution:

• Clean condenser coils at least twice a year. Dust and debris can trap heat and force the compressor to work harder.
• Check and replace worn or cracked door gaskets. A tight seal keeps cold air in and warm air out.
• Set appropriate temperature levels. Keep refrigerators between 37–40°F and freezers at 0°F. Always confirm local health and safety codes, since food service or healthcare businesses may be required to maintain specific temperatures for compliance and food safety.
• Defrost regularly if frost buildup exceeds ¼ inch. Excess frost reduces cooling efficiency.
• Upgrade to ENERGY STAR® certified commercial refrigeration equipment. These models can save businesses hundreds of dollars annually in energy costs.
• Ensure proper ventilation around refrigeration units. Crowded or enclosed setups trap heat, making systems less efficient.

6. Overlooked water heating systems: Water heaters often run hotter than necessary or operate inefficiently due to lack of insulation or maintenance. These systems can quietly drive up utility costs over time.

Solution:

• Lower the water temperature setting to around 120°F. This is sufficient for most business needs while saving energy. However, always check your local building, health or safety codes — certain industries, like food service or healthcare, may require higher water temperatures to meet sanitation standards.
• Insulate hot water tanks and pipes. This simple upgrade helps retain heat longer and reduces energy loss.
• Install low-flow faucets and aerators. These fixtures reduce hot water usage without sacrificing performance.
• Schedule regular maintenance for water heaters. Sediment buildup can reduce efficiency and increase heating time.
• If your water heater is over 10 years old, consider replacing it with an ENERGY STAR® certified model. Newer systems use advanced insulation and heating elements that save energy.

7. Forming habits and routines: Sometimes, inefficiency isn’t about equipment — it’s about daily routines. Lights left on, thermostats set too high, or machines running overnight can quietly add up.

Solution:

• Develop an opening and closing energy checklist. Include steps like turning off lights, adjusting thermostats and shutting down computers.
• Educate employees about energy efficiency. Encourage simple habits like shutting doors, using natural light and reporting leaks or drafts.
• Use scheduling tools or automation systems. Smart thermostats, lighting controls and timers can help reduce after-hours waste.
• Hold occasional “energy walk-throughs” with your team. A quick inspection can uncover new areas to save.
• Recognize or reward staff for energy-saving efforts. Building awareness and motivation helps sustain long-term results.

Each of these solutions can help your business reduce costs and improve comfort. Even tackling one or two areas can have a noticeable impact, especially when paired with regular maintenance and periodic mini-audits.

• Replace outdated lighting with LEDs or smart controls to cut lighting costs and improve visibility.
• Install programmable or smart thermostats to automatically adjust temperatures after hours.
• Seal air leaks and insulate exposed pipes or ducts to prevent heat loss and improve comfort.
• Enable sleep or power-saving modes on computers, printers and other electronics.
• Schedule routine maintenance for HVAC filters, refrigeration coils, and water heaters to keep them running efficiently.
  

Once those are complete, plan for bigger upgrades, like HVAC replacements, insulation projects or renewable energy systems, as your budget allows.

2. Create a simple energy-saving plan.
Turn your audit results into an organized action plan that lists each opportunity, estimated cost and potential savings. This document becomes your roadmap for long-term efficiency.

• Assign responsibilities to specific team members so tasks don’t get overlooked.
• Set realistic timelines for each improvement. Start with short-term (1–3 months), mid-term (6–12 months) and long-term (1–3 years) goals.
• Track progress monthly using your utility bills or online energy dashboards. Watching your savings add up can motivate your team to keep going.

3. Explore rebates and incentives.
Energy-efficient upgrades often qualify for rebates, tax credits or grants that can reduce upfront costs.

• Check with your local utility or energy provider for available efficiency programs or rebates.

🧑‍🔧EPB Energy ProsSM for Business Tip: EPB Business customers may be eligible for rebates on commercial energy upgrades. Talk to a local Energy Expert and learn how to qualify.

• Review federal and state programs through resources such as the ENERGY STAR Rebate Finder, Database of State Incentives for Renewables & Efficiency, or USDA REAP.
• Consult with your accountant to identify applicable business energy tax credits or accelerated depreciation benefits.

Taking action doesn’t have to happen all at once. Start small, celebrate quick wins and build from there. Over time, each improvement adds up, lowering your energy costs, extending equipment life and making your business more sustainable for the future.

• Track your monthly usage. Use your utility’s online portal or an energy management app to view trends and set alerts for unusual spikes.
  
• Schedule mini-audits every 6–12 months. A quick walkthrough can help catch leaks, filter issues or changing habits before they become expensive problems.
  
• Compare usage year over year. Review seasonal trends to see if upgrades like LED lighting or new HVAC systems are delivering results.
  
• Engage your team. Encourage staff to share ideas for saving energy — often, those using the equipment daily notice small inefficiencies first.
  
• Set new goals. Once you’ve achieved your initial targets, aim for the next level — like reducing overall energy use by 10% or earning ENERGY STAR® certification for your building.

Small, steady improvements can have a big long-term impact. By tracking progress and staying proactive, your business can keep lowering energy costs while maintaining a comfortable, sustainable workspace.

Q. Do I need special tools to perform my own audit?

Not necessarily. Many energy issues, like air leaks, outdated lighting or equipment left on after hours, can be spotted with a visual inspection. However, simple tools like a watt meter or infrared thermometer can help you measure energy use more accurately.

Q. What kind of businesses benefit most from an audit?

Every business can benefit from an energy audit. That said, facilities with high energy demands, such as restaurants, retail stores, warehouses or manufacturing spaces, often see the biggest savings potential.

Q. Are energy audits expensive?

DIY audits are free, and professional audits vary in cost based on building size and complexity. Many local utilities, including EPB, offer free or discounted professional audits to help small businesses identify savings opportunities without the upfront expense.

Q. How often should I do an energy audit?

Plan to complete a full energy audit once a year or whenever you notice a sudden increase in your utility bills. A quick mini-audit every six months can help you catch new issues before they lead to higher costs.

Whether you’re conducting a quick self-check or scheduling a professional assessment, regular energy audits keep your business operating efficiently and your energy costs in check.