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Calculating Energy ROI for Residential vs. Commercial

To better hone sales pitches, integrators should determine the ROI energy consumption for their residential and commercial clients.

Jason Knott · October 25, 2011

Integrators can greatly affect the energy usage of both their residential and commercial clients. By looking at the typical energy usage in commercial facilities vs. residences, integrators can better hone their sales pitches specifically for lighting control, shade control and networking thermostats by calculating ROI.

imageResidential ROI Calculations
Taking a look at these pie charts from the U.S. Department of Energy, the biggest chunk of electrical consumption in the average U.S. home is devoted to heating and cooling systems at 43 percent. That figure represents a strong opportunity for dealers to effect change for their customers’ bills with smart thermostats. Moreover, shade control is effective at directly cutting heating and cooling bills.

Eleven percent of all electrical consumption is devoted to lighting. Obviously, lighting control can cut those bills. Finally, 7.4 percent of usage comes from electronics, so use of Energy Star components with low phantom power draws is another way to help clients.

Dealers should consider creating an ROI chart for clients using this information. For example, take a monthly energy bill of $400 showing them how you can cut 15 percent in lighting ($6.66/month), 10 percent in electronics ($2.96/month) and 15 percent in HVAC ($25.80/month). Then add up the savings and calculate an ROI. In this scenario, it adds up to $35.42/month in real savings (in addition to the improved aesthetic qualities and convenience, of course.)

imageClick image to enlarge

Commercial ROI Calculations
Similar ROI calculations can be done in the commercial arena, but the energy usage averages are different.

In commercial locations, lighting control can be even more dramatic for reducing costs because it accounts for 25.5 percent of commercial energy usage.

HVAC accounts for 33.3 percent of bills while electronics represent 6.3 percent of consumption.

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  About the Author

Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at

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