Energy management is the process of monitoring, analyzing, optimizing, and controlling energy consumption to lower costs, decrease risk, and achieve sustainability goals. It involves a collection of tools and processes that provide visibility into the relationship between an organization’s operations and energy use.
Energy costs are a constantly rising operating expense that often needs to be absorbed by accepting lower profits or raising prices. Taking control of energy management stimulates growth by enabling organizations to lower operating costs without hindering productivity.
The details of energy management vary by industry and building type, but the concepts are the same.
Hospitals and healthcare facilities need to operate specialized equipment 24/7. Manufacturers need heavy machinery and energy-intensive processes for regular production. Utility companies need to optimize their grids to meet demand. Datacenters consume massive amounts of energy. And office-based organizations, government agencies, retailers, and other businesses have variable lighting, heating, and cooling needs to keep people comfortable and products stable.
In this article, we’ll examine the specifics of modern energy management, including:
- Benefits of energy management
- Signs your energy management needs to improve
- Energy management challenges
- Peer comparison and benchmarking in energy management
- Leadership approaches to energy management
Let’s take a closer look at the business opportunity energy management represents.
How energy management benefits your business
Energy management generally happens in the background of your operations. But it has a direct impact on costs, sustainability goals, risk management, and even investor confidence. As you increase alignment between your energy consumption and business needs, your organization becomes more effective and competitive by:
- Lowering energy costs
- Reducing carbon emissions
- Accelerating progress toward sustainability
- Strengthening energy infrastructure
- Improving regulatory compliance
Lowered energy costs
You can’t control energy costs if you don’t know the difference between what you’re paying for and what you need. Energy management gives businesses the tools to recognize this difference and close the gap. According to a 2025 EY survey, “64% of businesses say rising and unstable energy costs are impacting profitability and competitiveness,” and over 70% “plan to increase focus on electrification, emissions, and energy costs over the next three years.”
Monitoring energy consumption over time helps establish usage patterns and reveal anomalous usage. Ideally, your energy management tools and practices should enable you to pinpoint the times, processes, and in some cases even the specific equipment or infrastructure that result in unnecessary energy spend. More advanced systems will also send alerts to flag anomalies, allowing businesses to correct problems before they appear on utility bills.
Energy management can even help businesses secure lower rates or avoid excess costs by planning operations around a utility provider’s peak load. PJM, NYISO, and ISONE, for example, use capacity charges to apply different supply rates based on customer’s energy use during peak hours. As much as 40% of your regular rate may be based on your consumption during these peak hours.
Updating inefficient infrastructure and equipment is also part of energy management. More efficient buildings need less energy, so part of energy management involves estimating and measuring the return-on-investment for retrofits and other capital programs aimed at lowering ongoing costs.
Reduced carbon emissions
To comply with The Paris Agreement, participating countries must dramatically reduce greenhouse gas emissions by 2030. While most have been slow to implement or enforce standards, the reins are tightening, and organizations are feeling the social, financial, and legislative pressure to lower emissions. More than 10,000 companies around the world have set validated science-based sustainability targets, which include reducing carbon emissions.
Energy management plays a critical role in reducing carbon emissions by enabling organizations to recognize and eliminate unnecessary energy consumption, and by extension, unnecessary emissions. Monitoring energy usage and taking steps to improve operational efficiency directly impacts your organization’s carbon footprint.
Accelerated progress toward sustainability goals
Controlling and optimizing your energy use directly relates to your carbon footprint and environmental impact. Organizations can’t expect to reach their corporate sustainability goals if they aren’t monitoring energy data and using that information to take corrective action. Energy management is not only important for measuring progress toward your goals, but also for recognizing the types of initiatives that will be most effective.
Perhaps the vast majority of your energy consumption comes from a particular type of machinery or production process. Focusing on optimizing that process or improving the efficiency of that machinery will have a much greater impact on your sustainability goals than changing out lightbulbs or adjusting the HVAC system. Or maybe by monitoring your energy use more closely, you’ll find that you waste significant energy maintaining comfortable lighting and temperatures when your buildings are unoccupied.
Energy management reveals your best opportunities to reach sustainability goals, helping you achieve them faster.
According to Deloitte’s 2025 C-Suite Sustainability Report, implementing technology solutions was the most cited action executives took to achieve sustainability goals.
Improved regulatory compliance
Tracking energy usage is a key component of sustainability reporting and demonstrating compliance with sustainability-related legislation. Depending on where you operate, some or all of your locations may be required to provide accurate emissions data. And specific industries, equipment, or processes may have additional layers of compliance requirements related to energy efficiency and consumption.
If you aren’t overseeing, controlling, and optimizing your energy consumption, your organization will experience constant friction from sustainability regulations. Taking charge of energy management is essential for compliance today, and will only grow in importance as regulatory bodies around the world continue to raise standards.
Signs your business needs better energy management
Energy costs are rising. Even if you already have a robust energy management system and comprehensive energy management practices, your organization is feeling constant pressure to keep consumption and business needs tightly aligned. But it may not be clear where you’re falling short, or what specific problems may be signalling.
Here are a few of the most common indicators that your energy management practices or technology need to improve:
- Unexplained spikes in utility bills
- Manually maintained energy databases
- Difficulty tracking annual utility budgets and variances
- Uncertainty around sustainability goals
- Inability to measure the ROI of energy investments
- Restrictive local emissions caps or reporting requirements
You can’t explain spikes in utility bills
When you see unusually high utility bills, it often indicates an ongoing problem. And with poor energy management, you can’t tell when that problem began or where the energy waste is coming from.
A sophisticated energy management system lets you analyze interval data or even real-time data to pinpoint when a failure or error started impacting your energy use. Maybe a piece of equipment was left running outside of operating hours, and no one noticed. A switch was on for days when it should’ve been off. Or perhaps a component broke, and the spike in energy consumption was the first visible sign. Ideally, with submetering, you should be able to isolate the problem to specific operations or machinery, but real-time data can help with this as well by showing increases in consumption that never fell off or spikes that coincided with other changes.
Tango Energy & Sustainability alerts you the moment your energy consumption falls outside of your typical usage patterns based on historical data, so you can react quickly—before the problem shows up on your utility bill.
You’re manually maintaining energy databases
Part of energy management involves analyzing energy data for your entire portfolio—not just individual locations. Centralizing this data makes it easier to draw comparisons, recognize trends and anomalies in costs or usage, and understand your overall needs.
But your utility providers don’t do that for you. Their systems don’t talk to each other. And that means you need to translate your energy data from these disparate sources into a standardized format in a single location.
It’s a lot of work to manually compile this data in Excel or another spreadsheet solution, and the process introduces opportunities for human error every month—on top of the errors that may already be present in your utility bills. A basic energy management system should automatically import your data directly from your bills, and Tango will take the extra step of standardizing and auditing it.
It’s hard to track annual utility budgets and variances
Unpredictable energy bills are a clear sign of poor energy management. Seasonal variances and changes due to operational differences are ordinary and explainable. But if you aren’t monitoring your energy usage over time, across your portfolio, and in a single system, it’s easy for other variances to arise due to underlying problems.
Understanding and reducing this volatility is key to ensuring you can accurately forecast your energy needs, and by extension, your budget. Without effective energy management, your energy budget is an estimate, not a solid foundation for financial decisions.
You’re not sure where to start with sustainability goals
You can’t set goals if you can’t measure progress. Energy management helps you understand where you’re starting from, how your performance compares to others, and what’s driving your energy use—so you can set achievable targets based on actual possibilities, and then track your KPIs.
Armed with historical and real-time data, you can predict the likely outcomes of sustainability investments and monitor and report on your progress toward goals.
You can’t measure the ROI of energy investments
You know that more efficient lighting or a new HVAC system is reducing your energy costs. It has to be, right? But when so many variables impact your consumption and costs, calculating the return-on-investment feels like a guessing game.
Effective energy management reduces your variable costs and helps you put changes in the context of your historical data, so you can control for seasonal fluctuations and other factors, leaving you with more concrete ROI calculations for energy investments. Energy management software like Tango Energy & Sustainability also has dedicated measurement and verification capabilities to help you analyze and track the success of every efficiency project.
You’re bound by restrictive emissions caps or reporting requirements
Around the world, governments and other regulating bodies are increasing sustainability disclosure requirements and applying them to a broader range of organizations. Energy management is a foundational component of sustainability reporting, and essential for demonstrating compliance. If new sustainability regulations are about to be imposed on your operations, it’s probably time to bolster your energy management processes and technology.
Energy management challenges: why there’s still room for growth
Energy management isn’t new, but many organizations have yet to obtain the benefits. They lack the data, processes, tools, and priorities needed to take control and identify waste. Even for those that are well-equipped, effective energy management remains an ongoing challenge. And there are several reasons why:
- Data accuracy
- Data transformation
- Operational efficiency
- Reactive maintenance
- Upgrades and retrofits
We’ll go through each of these reasons one by one.
Energy data is notoriously inaccurate
Energy data comes from utility providers and metering systems. Every location in your portfolio has its own bills, and you may have hundreds or even thousands of utility providers, each of which likely has its own billing system. These providers can introduce errors to your data, such as gaps in billing periods, duplicate data, incorrect taxes, and discrepancies between meter data and billing data. Manually compiling all of this information multiplies the risk of error, and manual audits won’t always catch problems.
Our energy management software detected more than $600,000 in erroneous charges for one client. Energy data audits are a vital part of energy management, and improving data accuracy is an ongoing challenge.
Your energy management decisions and reports all flow from your energy data. If you can’t trust this foundational information, you can’t trust any insights built on top of it.
Energy data needs to be transformed to be fully utilized
Raw meter data and utility billing systems aren’t sophisticated enough to reveal wasteful energy consumption. This data doesn’t just need to be collected, it needs to be transformed—standardized, organized, and refined into actionable dashboards where you can analyze patterns and anomalies. You can manually build and maintain spreadsheets and create formulas to explore your energy data, but energy management software is purpose-built for this.
Without data transformation, using your energy data means wading through a mess of disparate sources, formats, and systems to hunt for insights and even answer basic questions about your energy usage. Corralling this data—especially at scale—requires dedicated tools.
Operational efficiency requires constant optimization
Let’s say your energy consumption is higher than expected. As you examine your portfolio, you notice some buildings use significantly more energy (and cost more) than similarly sized buildings, or others of the same type with the same operational needs. There are many reasons why this can happen, and effective energy management requires you to constantly cycle through these possibilities to maintain operational efficiency—ensuring that your planned energy spend fits each building’s actual energy demand.
Sometimes air leaks around windows, building penetrations, or external walls, causing you to lose heat (or allowing heat to enter), and it takes more energy than expected to maintain a comfortable temperature. You may need to periodically use thermal imaging, smoke tests, and other exploratory processes to maintain your building envelope and keep costs low.
Poor building management practices can also cause “phantom loads” where electronic equipment continues running while not in use, driving up your energy costs.
And even when everything appears to be in working order, faulty system controls can cause significant spikes in energy consumption—a common issue with heat pumps and boilers.
Energy management requires diligence. Variance in energy consumption can be a symptom of a wide range of problems, and your operational efficiency depends on your ability to regularly address them all.
Reactive maintenance is still rampant
As infrastructure and equipment wear down with use and age, they often use more energy and operate less efficiently. Then eventually something breaks. Organizations that have yet to adopt preventive maintenance practices or predictive maintenance software often don’t know an asset is failing until it fails. And in the interim, they’re wasting energy.
Energy management helps establish normal usage patterns, so you can recognize the signs of wear and tear sooner, but reactive maintenance practices make energy management more difficult by making anomalous energy usage more prevalent and greatly increasing the potential issues to investigate.
Energy management peer comparison: an emerging requirement
Benchmarking contextualizes your performance against the backdrop of your portfolio, competitors, or similar buildings. In energy management, it’s a crucial lens for understanding whether your infrastructure and operations are compliant or need updates. And in some cities, it’s a requirement.
New York City, San Francisco, Minneapolis, Seattle, Austin, California, Washington D.C., Chicago, Boston, and Philadelphia all require peer comparison to comply with ENERGY STAR standards. In other cities, voluntary peer comparison can still help earn your buildings the ENERGY STAR label, making them more desirable to tenants and allowing you to command higher rent prices.
But benchmarking isn’t just about ENERGY STAR. As you set sustainability goals and prioritize energy management, peer comparison plays an important role in monitoring your progress and envisioning what’s possible. If your facilities lag behind comparable buildings, it’s an obvious indicator that your energy management practices are creating a disadvantage. And when you see what peers are doing to improve performance, you can learn which updates and improvements are most worth pursuing.
Peer comparison generally groups buildings based on characteristics such as:
- Building type
- Location
- Year built
- Square footage
- Operating hours
- Heating/cooling system
Mandatory disclosure requirements have created steadily growing databases of building performance information, and the continual increase in voluntary reporting has only made these more valuable.
But you don’t have to manually build out your peer comparisons either. Energy management software like Tango Energy & Sustainability automatically connects to the Department of Energy Building Performance Database, “the nation’s largest dataset of information about the energy-related characteristics of commercial and residential buildings.” Using your building specs, Tango ranks your buildings based on performance compared to peers, and helps you identify the most worthwhile efficiency projects and drive down risk.
How leadership should approach energy management
The day-to-day work of energy management largely falls upon facility managers and maintenance teams. But this operational area is directly related to your organization’s growth. Energy management can mitigate risk, increase value, strengthen your brand, and decrease your environmental impact. But not without buy-in from leadership.
Executives need to:
- Establish energy management as a C-suite priority
- Explore the ROI of renewables and more efficient technologies
- Tie energy management decisions to risks and opportunities
Establish energy management as a C-suite priority
Your organization’s energy management initiatives need to flow from the top down. If facility directors and other roles with energy management responsibilities have to face an uphill battle for efficiency projects, updates, and retrofits that benefit their locations, they’ll shift their attention elsewhere and prioritize work that faces less friction from leadership.
The details of how each location can become more efficient or take greater control of its energy consumption will vary by building and context, but the overarching concepts need to be driven by leadership. Your COO, CFO, or another comparable role needs to be in charge of developing your energy management strategy and driving its execution, and this priority needs to be formally communicated—with a budget to prove it.
Explore the ROI of renewables and more efficient technologies
The costs of alternative energy sources and more energy-efficient technology is continually falling. In many cases, there are also established incentives to drive adoption, like renewable energy certificates (RECs), tax credits, power purchase agreements (PPAs), and subsidies. Executives should lead the exploration of these options at scale, testing scenarios to identify which major energy investments offer the best opportunities for your organization to reduce costs, improve compliance, and appeal to investors and consumers.
Tie energy management decisions to risks and opportunities
Energy management is risk management. Every choice to invest or not invest in your operational efficiency and resilience carries risk. And some of these choices represent valuable opportunities to generate ongoing cost savings, gain a competitive advantage, or improve public perception. Your leadership needs a holistic understanding of your energy costs, where there’s room for improvement, and which priorities will lead to the best outcomes for your organization.
By framing energy management decisions around organizational risks and opportunities, leadership can more honestly examine strategic choices like:
- Working with suppliers who have demonstrated (or failed to demonstrate) tangible commitments to sustainability.
- Publicly planning to meet aggressive emissions targets
- Increasing your reliance on renewable energy
- Reducing variable energy costs to drive growth
Explore energy management solutions with Tango
The challenges of energy management compound at scale—and so do the opportunities. But your energy data is the key. And the companies that are best equipped to control and optimize their energy costs are going to pull ahead of their competitors with leaner operations, better investment decisions, and fewer sustainability risks.
Tango Energy & Sustainability is a three-in-one solution for energy management, sustainability reporting, and carbon accounting, giving you everything you need to:
- Detect anomalous energy usage in real-time
- Automate utility bill consolidation
- Streamline energy data auditing
- Benchmark your building performance
- Track the ROI of energy initiatives
- Optimize operations around peak loads
- Calculate emissions and other performance metrics
- Simplify compliance with disclosures
- And more
Tango’s suite of energy management tools position your organization to grow by eliminating excess costs, improving operational efficiency, and making the path to further optimization clear.
Want to see what Tango Energy & Sustainability can do for you?
