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When it comes to energy, buildings are dumb. Here’s how they are getting smarter.

Technology has revolutionized our world. It has improved how we communicate with others, learn information, call a taxi, order books, and much more. However, one sector that has been slow to adopt technological advancements is the buildings sector. Specifically, energy use within buildings.

Many buildings, especially those of small- to medium-sized businesses, have no building energy management system. Of those that do, their management systems are based on 20th-century technology.

With an increased awareness of the need to make buildings more energy-efficient, the building energy management sector is finally evolving. Software companies are harnessing the power of artificial intelligence to optimize energy usage and operations. These groundbreaking solutions not only save customers’ money and time, but also collectively make our grid cleaner and more resilient.

Let’s take a look at the innovation going on in this space.

Energy management and energy efficiency

At the center of the new wave of building management systems are energy management and energy efficiency solutions that reduce the total amount of energy used by buildings.

New-age solutions reduce energy consumption by using machine learning to collect and analyze data about buildings’ equipment, usage patterns, utility rates, local weather, and more. Then, software can either automate building equipment directly or deliver actionable insights and reports to building owners.

Targeting specific loads and specific industries

Many of the new crop of energy management solutions target a building’s non-essential loads such as heating, ventilation, and air conditioning (HVAC). Some companies, however, specialize in automating business-essential functions within specific industries. For example, Powerhouse Dynamics specializes in the food retail industry and can optimize a wide range of essential kitchen equipment.

Technology behind energy management

One way that intelligent software reduces energy usage is by learning which units (of HVAC, refrigeration, etc) are most efficient, and then running those units the longest. Another approach, which primarily targets HVAC energy usage, entails optimizing the flow of outside air into the building.

Demand management solutions

A growing sector within the energy management space is demand management.

When commercial buildings reach a certain kW threshold of demand per month, utilities charge a demand charge in addition to their usual energy charges. Demand charges are determined by the highest 15-minute interval of kW demand per month, or as our CEO John Powers likes to say, “the biggest mistake buildings make each month.” That kW peak is multiplied by the utility’s demand rate, which can be $10 or $20/kW or even higher.

Utilities charge demand rates in order to disincentivize buildings from using too much energy at a time, which would jeopardize the grid’s supply and demand equilibrium. What this means for businesses, however, is that demand charges can account for as much as half of their electricity bill and cost thousands of dollars each month.

Luckily, software companies have designed solutions that benefit both utilities and end customers.

Demand response

The main solution that helps utilities manage demand within their territory are demand response programs. Companies that administer demand response programs, like Leap and Enbala, provide software that integrates with building control systems. Then, when needed, either the building owner or the software itself can easily shut off machinery or reduce the usage of specified loads, such as air conditioning. In return for their participation, building owners receive payments for their reduced energy usage.

Demand charge management

Companies like Extensible Energy specialize in helping end customers reduce their demand charges. Software solutions can monitor and control buildings’ loads to reduce their highest monthly demand peaks, and save customers thousands each month. Some demand charge management software automates building functions, while others just deliver insights and suggestions --similarly to the bifurcated energy management solutions discussed above.

Non-automated solutions monitor and analyze a building’s data in order to provide visibility into the customers’ demand charges and profiles of its different loads, but they do not control loads or make automated decisions about what loads should be turned on or off. Companies like Mach Energy alert users ahead of time when a high demand peak is forecasted, while other companies deliver reporting afterward.

Automated demand management solutions come in different flavors as well. The more traditional form of demand management is demand curtailment software, which simply turns loads off once demand reaches an agreed-upon limit.

However, companies like ours have developed more intelligent, optimized alternatives that reduce demand without sacrificing comfort or convenience. At Extensible Energy, our DemandEx software takes into account real-time solar production and energy storage, demand rates, time-of-use rates, weather data, occupancy patterns, and more to make the most cost-effective energy usage decisions, 24/7.

These decisions include optimizing when devices turn on and off to avoid high demand peaks. This way, our end customers don’t have to worry about their electricity bill and can instead just focus on their core business.


These are just a few of today’s building energy management software trends that are helping utility customers and utilities to reduce costs and to make dumb buildings smarter about when and how they use energy.

Contact Extensible Energy for a free building energy evaluation.

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