While many national policies regarding the decarbonization of buildings focus on the residential sector, energy experts suggest prioritizing commercial buildings due to their disproportionate energy use, said “Achieving Zero-Carbon Buildings: Electric, Efficient and Flexible,” a new report from the Energy Transitions Commission (ETC).
According to the report, commercial buildings account for 20% of the global building stock by area yet consume 40% of total building operational energy. However, most regulations and incentives are intended for residential buildings, which comprise 80% of the building stock and are responsible for 60% of operational emissions.
“Policymakers are often playing catch-up with technological progress. While laws promoting renewables and electrification exist, they are not enough, and bigger swings must be taken. We need a strategic approach, and it should be based on digitally retrofitting the commercial buildings first,” said Donatas Karčiauskas, CEO of Exergio, a company that implements AI-based energy efficiency tools in commercial buildings.
The report emphasizes how policymakers, asset owners, and technology providers can work together to address this challenge effectively. It claims that optimizing commercial buildings would cut more energy waste and carbon emissions because they consume nearly twice the energy per square meter compared to residential buildings.
Commercial buildings differ significantly from residential ones in various energy consumption patterns, and, according to energy experts, this is why they should be prioritized for decarbonization.
“Residential buildings have predictable energy usage patterns based on daily routines. Commercial buildings, on the other hand, operate on a much larger scale. Their occupancy rate fluctuates, and they have extended operating hours and intensive HVAC demands,” Karčiauskas said. “This means inefficiencies are magnified. Lighting, appliances and cooling systems often run at full capacity even when not needed. Digital tools such as AI-powered energy management can solve that by adjusting ventilation, heating and cooling in real-time.”
The report provides insights into the main areas that use energy and breaks down differences between residential and commercial buildings.
Due to their size, high occupancy and dependency on energy-intensive equipment (e.g. computers), commercial buildings consume more electricity in the lightning and appliances area. In the U.S. and E.U., electricity supplies 35% to 50% of commercial building energy needs, compared to around 25% of residential buildings.
Space and water heating are less dominant in commercial buildings, accounting for 30% to 40% of total energy use (compared to over 60% in residential buildings). However, heating demand is significantly higher in sectors such as hotels and sports facilities.
Additionally, commercial buildings generally require more cooling, even in regions where residential air conditioning is uncommon. Space cooling accounts for approximately 15% of electricity consumption in commercial buildings, and about 6% of energy use in residential buildings.
The report recommends installing building management systems that integrate sensors, smart thermostats and predictive AI to achieve real efficiency gains.
“For example, an office building with AI-powered sensors can preemptively reduce cooling loads before peak hours, and lower overall energy consumption without compromising comfort,” continued Karčiauskas.
In Ozas Shopping Mall, located in Vilnius, Lithuania, Exergio previously implemented an advanced HVAC optimization system that helped save even more energy than ETC’s estimates — an AI-powered solution saved 29% of energy.
