Commercial Energy Management Gets An Upgrade From IoT

By Emily Newton

Internet of Things (IoT) integrations are becoming more common, particularly for IoT energy management in commercial buildings. This surge in adoption is driven by the need to offset rising costs and growing inefficiencies with real-time monitoring and granular control. How does this technology outperform traditional alternatives?

The Value Of Power Optimization In Commercial Sectors

The power grid is under strain in many places because there is limited infrastructure to support cloud computing and artificial intelligence technologies — and that is before taking its age into account. Energy demand has increased exponentially despite bottlenecks, so many businesses in the United States have seen prices rise.

The U.S. Chamber of Commerce recently released the 12th edition of its electricity price map. The national average was 12.99 cents per kilowatt-hour in 2024, up 2.44% year-over-year. This change may seem insignificant, but it represents the fifth consecutive increase in as many years. It increased 22.55% from 2019 to 2024, revealing a concerning trend.

Costs will likely continue rising as more industries embrace electrification. Renewables may help counteract this increase, but adoption is relatively low. Expanding infrastructure to improve supply and distribution is also an option, but it may not be practical.

The grid connection queues are lengthy and complex, with supply and consumption projects often spending years waiting before being connected. Building new transmission lines can take up to eight years, according to the International Energy Agency. Compounding the issue, lead times for critical components like cables and transformers have doubled in the past three years. The long-term solution is to optimize power consumption, not build more infrastructure.

Businesses Need A Powerful Technology Like IoT

IoT energy management is the prevailing optimization solution for commercial sectors because it improves visibility and enhances control, regardless of facility size or number. Since each node delivers real-time insights to a centralized location, an internet-enabled network offers unparalleled scalability.

Moreover, the upfront investment is relatively low. Sensor expenses have decreased dramatically as the technology has become more mainstream. They cost just 4 cents on average. Those who buy in bulk can secure discounts, making the price even more digestible.

Both small businesses and large enterprises can implement this hardware. Since this technology is already well established in multiple commercial sectors, they would benefit from affordability and variety. Numerous out-of-the-box options exist, with more in development.

The IoT is expanding exponentially, becoming increasingly prevalent in numerous industries. Experts predict it will grow to 32.1 billion IoT devices by 2030. Business leaders should recognize its importance and integrate it into the existing electrical infrastructure. In addition to reducing power costs, it can improve asset upkeep and enhance regulatory compliance.

How IoT Upgrades Affect Commercial Energy Management

Many commercial sectors have embraced common IoT energy management technologies such as smart meters and heating, ventilation, and air conditioning (HVAC) systems. They enable granular control, helping them make smarter decisions.

Smart Meters Monitor Consumption

Smart meters provide up-to-the-minute visibility into energy usage, current, and voltage by continuously measuring and recording various metrics. They can detect patterns of inefficiency, enabling business owners to make informed decisions.

Low-power wireless connectivity lets them periodically transmit information to the utility provider and customer, giving everyone an in-depth overview of up-to-the-minute data points. They can improve bill accuracy and service reliability.

Smart HVACs Optimize Conditions

The HVAC system often accounts for one of the largest portions of electricity use in commercial buildings. Embedding IoT devices into it enables automatic temperature, humidity, and ventilation adjustments based on environmental conditions, improving energy efficiency.

Internet-enabled sensors significantly improve system performance, bringing it closer to peak efficiency. In one case study, they increased HVAC efficiency by 16% and cost-effectiveness by 15%. They address temperature control issues in confined environments, benefiting facilities like data centers, factories, and commercial kitchens.

Sensors Enable Dynamic Load Shifting

Electricity is more expensive during peak hours when demand is high. In commercial buildings, internet-enabled systems can shift the timing of energy use from peak to off-peak hours, optimizing consumption, enabling dynamic pricing, and helping stabilize the grid.

Emerging Commercial Energy Management Solutions

Embedding sensors into meters, HVACs, and load balancing systems is not novel. Early adopters push the implementation boundaries by exploring how the IoT interacts with artificial intelligence, edge networks, and self-healing technology.

AI And Machine Learning Integration

A machine learning integration is the natural evolution of IoT energy management. Algorithm-empowered insights enhance decision-making, improving everything from battery storage efficiency to reporting accuracy.

There are multiple benefits of machine learning integration:

• Intelligence: Machine learning models evolve as they absorb new data.
• Speed: Algorithms can process information many magnitudes faster than humans.
• Accuracy: AI can avoid human error and rule-based logical flaws.

In one case study, a team field-tested an IoT energy management platform utilizing machine learning to predict power consumption and electricity prices in Ireland and Greece. The Greek site saved 6.9 kilowatt-hours daily, lowering the monthly bill by 22%. At the Irish site, it reduced a combined heat and power unit’s electricity use by 61%.

Edge-Computing-Based Analysis

Edge networking enables true, real-time data analysis by circumventing the need for cloud processing. It is a practical addition to IoT networks located in hard-to-reach areas or deployed for time-sensitive applications.

Self-Healing Grid Architecture

Self-healing smart grids can seamlessly handle power interruptions. Sensors can detect and isolate electrical faults by reconfiguring power flow to minimize adverse effects. They automatically trigger switchgears and controls to respond to such issues.

Ongoing Challenges Hindering Widespread Adoption

Even though IoT energy management is well understood and established in many commercial sectors, implementation challenges still exist. The silver lining is that they are relatively easy to overcome with the right strategy.

Data Security And Privacy Concerns

Since IoT devices collect facility, environmental, and utility data, data privacy is not a pressing issue. However, since the information is so granular, hackers may be able to infer employee behavior or company finances.

The intersection of privacy and security is clear. Professionals should mitigate potential damage by securing their data storage systems against tampering, eavesdropping, and exfiltration. Preventing a breach preserves privacy and mitigates regulatory complications.

Scalability And Network Reliability

While the IoT’s affordability and simplicity support expansion, not all solutions are scalable. For instance, while AI-powered sensors may get great results, they are resource-intensive, defeating the purpose of implementation. Commercial sectors need devices with ultralow power consumption and long battery lives.

Key IoT network protocols like the Message Queuing Telemetry Transport and Data Distribution Service maintain low power consumption while supporting high-volume, low-latency communication.

Legacy System Interoperability Issues

In addition to backend infrastructure, IoT implementation involves deploying data storage systems, analytics tools, and user dashboards. Ensuring interoperability with existing systems is vital for simplifying utilization and maintenance.

The Bright Future Of Commercial Energy Management

Organizations that embrace IoT energy management will see prices drop and energy efficiency jump, which are crucial improvements as electricity costs rise and grid connection queues lengthen. Sensors could transform power consumption monitoring and reporting, especially when equipped with machine learning integration or deployed in edge networks.