---
title: Restaurant Energy Use and Cost Pressures Explained
description: Reduce restaurant energy consumption with HVAC upgrades, LED lighting, equipment monitoring, and Energy as a Service solutions that improve efficiency.
image: https://blog.budderfly.com/hubfs/Blog-RestaurantLoweringEasy.png
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Dec 16, 2022
# How to Reduce Restaurant Energy Consumption with Improved Efficiency
Utility bills are a huge part of anyone’s monthly budget. As a restaurant owner, you may have already noticed that energy typically accounts for 3-5% of restaurant operating costs. Fortunately, restaurants can reduce energy consumption without disrupting day-to-day operations. This is part of effective restaurant energy management.
With [a few tweaks](https://www.budderfly.com/blog/restaurant-energy-management) to your daily routine and a little help from an energy-as-a-service partner, you can take charge of your energy bills. In this article, you will see where restaurants consume the most energy and learn what you can do to cut back.
## **Quick Answer: What Uses the Most Energy in a Restaurant?**
Restaurants typically spend the most energy on HVAC systems, refrigeration, cooking equipment, lighting, and water heating. HVAC systems alone account for approximately 25-30% of energy costs, while lighting can represent up to 45% of electricity usage. Upgrading equipment, monitoring consumption, and improving operational efficiency can significantly reduce utility expenses.
## **What Uses the Most Energy in a Restaurant?**
The average restaurant energy consumption rate is [5 to 7 times higher than any other type of commercial building](https://www.energystar.gov/sites/default/files/tools/SmallBiz_Restaurant_factsheet.pdf). Even when looked at by industry, food service buildings top the charts.
Source: [U.S. Energy Information Administration](https://www.eia.gov/consumption/commercial/reports/2012/energyusage/images/fig4.png)
Your restaurant may be wasting a lot of energy without you realizing it. The first step to optimizing your energy usage is knowing where your restaurant is using the most energy, then you can find ways to reduce it. Here are the ways a typical restaurant consumes energy and tips for how to cut yours down.
### **HVAC Systems**
An HVAC system is necessary to keep customers and employees comfortable. In the restaurant industry, the energy consumption rate from HVAC systems is [typically 25-30%](https://www.qsrmagazine.com/sponsored/how-restaurants-can-reduce-hvac-expenses-60-percent) of your entire energy bill.
Outdated systems drive up consumption. Even HVACs that are just 10 years old can consume up to twice the energy of more modern systems.
Poor insulation and excess kitchen heat can further increase HVAC energy consumption. In a building that does not have sufficient insulation, you’ll have to run your HVAC harder and for longer. Additionally, your kitchen creates heat while you cook, meaning your air conditioner has to put in that much more effort to keep your premises cool.
### **Lighting**
Here’s a staggering restaurant energy consumption statistic: lighting may account for [15-45% of a restaurant’s electricity bill](https://ec.europa.eu/environment/emas/takeagreenstep/09-article.html#:~:text=Typically%2C%20lighting%20accounts%20for%2015,in%20small%20hotels%20and%20restaurants.). In regions that do not require significant heating or cooling, lighting is sometimes the biggest source of restaurant energy consumption.
Plus, traditional lighting [wastes extra energy as heat](https://www.energystar.gov/ia/products/commercial_food_service/downloads/Lighting_Fact_Sheet_for_Restaurants_FINAL_for_posting.pdf) which, you guessed it, has a negative impact on your HVAC.
### **Water Heating and Sanitation**
Food-safe sanitation consumes a lot of water. Restaurant energy consumption statistics collected by the Green Restaurant Association show that restaurants consume [300,000 gallons of water per year](https://www.dinegreen.com/water).
Additionally, you need hot water to kill germs and scrub sticky food off your dishes. The energy you consume heating your water tanks is also eating your budget.
### **Commercial Kitchen Equipment**
Walk-in freezers, commercial ovens, and fryers are some of the biggest energy consumers in your kitchen. A typical commercial deep fat fryer uses 18,000 kWh (kilowatt-hours) per year; a startling statistic considering the average American household uses a total of 12,000 kWh.
Many customers enjoy their drinks with ice, and some recipes use ice as an ingredient. 2.5 million commercial buildings across the United States use an ice machine resulting in [a combined electricity bill of $1.62 billion annually.](https://ouc.bizenergyadvisor.com/article/ice-makers)
Older restaurant equipment also consumes significantly more energy than newer machines. In fact, PG&E suggests that energy waste caused by outdated food service equipment accounts for [80% of a restaurant’s energy consumption](https://www.pge.com/en/mybusiness/save/smbblog/article/10-ways-food-service-businesses-can-become-more-energy-efficient.page?redirect=yes).
## **How Can Restaurants Reduce Energy Costs?**
### **Upgrade HVACs to Efficient Models**
Reduce energy consumption by upgrading your current HVAC system to a newer, high-efficiency model. For HVACs that are over 10 years old, it's likely time for an upgrade. Replacing outdated systems can offer substantial energy savings immediately. ([And you may be able to do it with zero upfront cost](https://www.budderfly.com/the-budderfly-effect/fast-casual-restaurants).)
Preventive maintenance, changing filters regularly, and installing programmable thermostats can help keep your HVAC energy consumption under control. Getting your insulation checked regularly will also help you get more from your HVAC system.
Staff training, often overlooked, can help save too. For example, you may select a set temperature point for each season and encourage your staff to keep it there. Even little things like not leaving doors open can have a significant impact.
### **Update Light Fixtures and Reduce Waste**
If your restaurant is still using energy-intensive fluorescent or halogen light bulbs, it's time to switch to a more energy-efficient light source, such as LED bulbs. LED lighting looks contemporary, too, and you can find lighting fixtures for any ambiance.
Whatever lights you use, staff policies go a long way. Encourage staff to turn off lights that aren’t in use. Regularly cleaning the dust off of your light fixtures will also discourage staff from turning dimmer switches up too high.
Restaurant electricity monitoring that lets you track how much electricity your lighting uses can be a good way to keep your staff accountable to your “lights off” policy.
> ### How a Burger King Owner Saved Over 1 Million Kilowatts of Energy.
>
> ### [Read the case study](https://case-studies.budderfly.com/how-a-burger-king-owner-saved-over-1-million-kilowatts-of-energy).
### **Monitor Water Usage and Heating**
An intelligent energy monitoring solution can track water consumption and heating. Temperature monitoring helps reduce your energy consumption by helping you keep your water tank at a stable temperature. You will even receive insights into off-peak electricity pricing, allowing you to schedule dishwashing for those times of the day.
Your serving staff can also cut back your water consumption. By only offering water to customers upon request [you can save 2 gallons per glass](https://www.dinegreen.com/water); from both the drinking water and the water you would have used to wash the glasses.
### **Optimize Kitchen Equipment Usage**
Monitoring the temperature of your freezers and refrigerators is a great start. Not only will you save energy, but you will also reduce the cost of lost inventory by preventing food spoilage.
Internet of Things (IoT) sensors and advanced software monitor energy usage of a wide range of commercial kitchen appliances. They provide instant insight into whether the equipment is operating normally, if energy usage is higher than normal, and how you can reduce consumption.
High-efficiency appliances can save hundreds of dollars every month, compared to older equipment, and pay for themselves. Yet they can come with a steep upfront cost. And that’s where an [Energy as a Service (EaaS)](https://www.budderfly.com/energy-service/) partner can help.
## **What’s the Easiest Way to Reduce Restaurant Energy Consumption?**
An EaaS partner like Budderfly can make energy efficiency upgrades at your restaurant a reality. We [take care of the upfront expense](https://www.budderfly.com/the-budderfly-effect/fast-casual-restaurants) (and risk) of upgrading your HVAC systems, lighting, refrigeration, and more to higher-efficiency equipment and advanced energy-saving technologies. We also take care of installation and equipment maintenance, meaning a hassle-free experience for you.
Our efficiency monitoring will help you track how much you save, and you’ll receive real-time insights into how you can reduce energy consumption further. We’ve worked with more than 9,000 business locations across the U.S. and have provided our customers with a 22 % average annual energy savings.
[Contact us](https://www.budderfly.com/lets-talk/) to start saving energy today.
## **FAQs**
### How much energy does a restaurant use?
Restaurants typically use five to seven times more energy per square foot than other commercial buildings.
### What uses the most energy in a restaurant?
HVAC systems, refrigeration, cooking equipment, lighting, and water heating consume the majority of restaurant energy.
### How can restaurants lower electricity costs?
Restaurants can lower electricity costs by upgrading HVAC systems, installing LED lighting, maintaining equipment, monitoring energy use, and investing in high-efficiency appliances.
### Is restaurant energy monitoring worth it?
Yes. Monitoring systems identify inefficiencies and can help reduce waste, equipment failures, and unnecessary utility spending.
---
### Recent Posts
#### [What Is Holding Back the Energy Transition? 10 Challenges Facing Building Owners](https://blog.budderfly.com/what-is-holding-back-the-energy-transition-10-challenges-facing-building-owners)
Sep 25, 2026 09:05:54 AM
#### [CapEx, Debt, or EaaS? The CFO’s Guide to Energy Upgrades](https://blog.budderfly.com/cfo-guide-off-balance-sheet-energy-upgrades-eaas)
Sep 14, 2026 10:02:49 AM
#### [How Utility Rate Complexity Makes Lowering Energy Bills Challenging](https://blog.budderfly.com/utility-rate-complexity-makes-lowering-energy-bills-challenging)
Sep 10, 2026 11:22:35 AM
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